To start off, I understand that the blockchain is, by its very nature, decentralized. So I'm not talking about the core software that is bitcoin. I wanted to that out of the way.
In the latest issue of my newsletter, I started to think about something that I had noticed occurring in the bitcoin ecosystem that reminds me of other events that have taken place in the past. And it left me with a question: is centralization inevitable?
Why do we have so many big banks? Why is Coinbase growing larger and larger? Why is the mining pool getting more centralized? Why did 70% of the total number of bitcoin wind up being held at MtGox?
For a technology that is so great and so decentralized, there are so many people that naturally start moving toward a centralized service provider. Is this just because humanity likes to be centralized with someone else to make the tough decisions? Or is there some other reason that even with a technology that is supposed to be decentralized, things are becoming centralized? I'd love to hear your thoughts.
