Bitcoin Forum

As bitcoin enthusiasts we all like the concept of both privacy and Decentralisation and even in addition to that the bitcoin network also packs transparency via a Blockchain network that is easily accessible to anyone with internet of course. Anyways, decentralisation comes with a very nice advantage of having no central body in charge of controlling the network . What about making decisions? Would that be a yes?

Well firstly in this context I'm not referring to bitcoin developers as decision makers rather more of whales and big firms. The concept of decentralisation kind of suggests that everyone has a relatively equal right or rather power in the network more like the concept of egalitarianism and democracy.

Now I'm not talking about politics here so let me cite an example to make the picture clearer. The bitcoin network has a supply cap of 21 million coins and as of, today excluding Satoshi's mined coins we have roughly 18 million coins in circulation. Now this constitutes the hodlings of both individual retail holders like you and I as well as WHALES and bigger Firms like BLACK ROCK.

If power is relatively shared based on decentralisation, then these whales and big firms have a bigger edge on the block chain in price influence than retail holders since they Hodl more coins (POWER). We've seen many times where prices move either up or down drastically when big firms either buy or sell huge amounts of bitcoin. So could it be seen as a flaw in decentralisation? Remember nothing is 100% flawless!!

Decentralisation has nothing to do with Bitcoins open market and the price at which it is bought and sold.
Decentralisation has everything to do with the concept that no single entity controls the network/Blockchain
and anybody and everyone is free to use it. Decisions on the Blockchains future i.e changes to the network
are made between the developers, miners, node runners and me . . .and you.

Nobody has the power to stop all the millionaires in the world from buying Bitcoin, and they dont have the
power to take it off us! they have to buy it just like us.

The market moves on speculation by me and you not by a flaw in decentralisation.

To be brief you need to see decentralisation as an entity against a centralised body. There is no Central body that can boast to have the full decision making in crypto-currency. Yes a group of bug whales who owns a very Huge chuck of Bitcoin can or may affect the price if the sell or buy but this whales aren't a central body. And even if they can affect they price it can't be for long term. And if you aren't moved by FOMO or FUD then you should not be too bothered.

Let me start by asking, is decentralization tied to network or the market?.

I think there is a contradiction here between the Bitcoin network and the whole market thing. Just as you've said, decentralization makes sure no central authority is in control, and I believe that is strongly related to the Bitcoin network itself, and doesn't really enforce same to the market.

Of course, I agree that there are some organizations or people that tend to have more of the Bitcoin than others, but that doesn't mean that there is a flaw in the technology or the network itself. It's just some random economical principles where those with more money or resource can purchase more than the other.

Okay fine, Mia Chloe has 30 million Bitcoin which makes him the highest holder, but that doesn't give Mia Chloe the authority to assign working days of the Bitcoin network. It doesn't give Mia Chloe the authority to create more Bitcoin without the consultation of the community.(just an example)

So, I don't think this could be a flaw in decentralization. We can maybe say that there will surely be some price manipulation if any of this major holder, like the popular we know of(don't really need to mention the name), decides to sell and buy back.

Reacting to this last piece here, so your notion is actually if whales can buy and the price pumps up it defeats decentralization but that is not the decentralization issue we are here for, a Bitcoin decentralization is where you can decide today to be a whale your self by simply buying millions of bitcoin with restrictions as a in centralized networks, decentralization is when you can send your bitcoin to any address of your choice, without transaction been censored,

The only thing the whales have is simply more bitcoin which it’s effects is felt base on simple demand and supply, should they sell alot it cause panic but that doesn’t enforce your own sell, should they buy it causes FOMO but still that doesn’t enforces anything. Whales can only temper with decentralization if there large junk of bitcoin make them decision makers when it comes network forks or things like that

Bitcoin design is decentralized because there's no central entity or Third party that can control the Network.
Decentralization doesn't mean or guarantee equal distribution of wealth
It's a common feature in many decentralized and even traditional system.
Bitcoin price volatility is because it's relatively still young and not because there's a flaw in decentralization.
As long as they don't have influence over the rules and protocols of the Blockchain because of the quantity of Bitcoin they have
There's no flaw in decentralization as a result of Quantity imbalance.

When most of us are celebrating the price rise that was triggered by the approval of spot Bitcoin ETF. I observed that some members in this forum warned about the negative effects of this move. There is nothing anybody can do because the market is free, people can buy and sell without restrictions. But as the amount of Bitcoin institutional these investors are controlling keeps increasing, they might have some level of influence over the market. Bitcoin might never be centralized but if these whales keep acquiring more coins we might end up having a partially controlled market where they can cause FOMO at will.

Yeah the flaw of decentralization is the decentralization itself.

Even though technically Bitcoin's network is decentralized and no one control it, but what's the point of having decentralized network when almost all coins are belong to centralization? it depends on their hands to move the coins, while we and the miners only wishing them to move the coins (if we're in that situation in the future).

If they continue to hold and never sell their coins, they will affect the price for long term.

You are in charge of your bitcoin and your own bank, you don't need a third party as a central point for your transaction to be carried out. The network is controlled by everyone because it's an open source. Because bitcoin is for all makes it difficult for anyone to manipulate the price for long. Decentralization is not dead even if whales have most bitcoin with them because you holding your bitcoin in your private wallet is still in control of your bitcoin and can do whatever you like with your bitcoin.

When governments of every country worldwide work together to ensure that exchanges comply with policies, they become the central power that compromises decentralization where they can freeze and block the trades and transactions of someone. The government can tell the exchanges to delist coins and tokens or block the funds sent from addresses. More flaws when the developers have a public profile.

The only decentralization left is nothing can stop someone from releasing altcoins.

Decentralized means transactions cannot get censored.  At least that’s how I understand it. If somebody happens to own 5 million bitcoins, that has no effect on its decentralization. It is just somebody owns lots of coins. Make it 20 million btc and still nothing will change. Dev decisions are kind of centralized but that’s to be expected because in the end btc is human made. It didn’t occur naturally or written by the AI. (Some say satoshi was AI but I have no idea about it) So somebody has to come up with the new ideas and implement them. The network itself is decentralized.

Yes, you are right. Decentralization doesn't ensure equal distribution of coins and equal influence among every adopters. Whales will always have a deeper influence on this market and will consequently be able to manipulate in which directions we are going to head.

However, this issue could be solved if always a whale or a group of them tried to manipulate the market, average investors immediately bought the coins being dropped for sale in the market. That is how crypto enthusiasts decrease the impact of whales on long term.

I believe we did some progress since the beginning, but the institutional investors are a big concern on this matter yet.

Decentralization in Bitcoin has to do with the protocol. There is consensus that the original protocol surrounding Bitcoin cannot cloned accurately where as no single entity can boast that they have full authority over the network.

There can be influence from several factors most especially, political influence but that does not mean there is one single control over Bitcoin. The act of decentralization in Bitcoin has no flaws. I am certain of that.

Why would whales being able to buy and sell bitcoin be a flaw of the network? If you excluded the whales from participating then THAT would be a serious flaw.
The strength of bitcoin is that ANYONE can buy and sell it. That is the very definition of decentralization. It is a strength of bitcoin's decentralization not a flaw or weakness.

If you started excluding certain groups of users such as millionaires or billionaires, then it could no longer be called decentralized and the network would collapse overnight.

It wouldn't be easy replying to everyone here by quoting according to how I'm supposed to that's if I'm not going to pyramid quote which is something I don't like doing. Now everyone here have made some really nice suggestions and some seem to understand and disagree with my point and some others seem to agree. I'm not directly associating decentralisation with the idea that everyone has to have equal power which is impossible even without the concept of Decentralisation.

The point here is relatively distribution of power can still be used to alter significant things like price and adoption. The more whales buy bitcoins from retailers  and small HODLers the fewer the number of persons sharing the power of decentralisation in this context.

I think you made a typo error here ;) because no one can own 30 million coins since it's more than the market cap.

This has never been about money - It has always been about solving a real problem! Of course, as a side effect, solving that problem makes Bitcoin the best form of money to ever exist.

Bitcoin is absolutely decentralized. As stated in the whitepaper, it prevents electronic coin double-spend attacks using a mechanism inspired by hashcash. This principle remains valid today and has nothing to do with the perfectly legitimate right of organizations to use it. Similarly, organizations holding gold and creating gold-backed assets don’t diminish gold’s intrinsic value.

While I understand the concern about greedy organizations potentially trying to take control of Bitcoin, do we actually see this happening? For Bitcoin to maintain its value, it must remain useful. Any violation of its principles would spark an instant revolution; the response from the cypherpunks who have dedicated their lives to this technology would be overwhelming, and the market would adjust accordingly, supporting the rightful version of Bitcoin / Bitcoin ideas.

Ideas cannot be destroyed, only improved. In my view, Bitcoin has grown too big to fail. I will support any project that adheres to its profound fundamentals, with Bitcoin "Core" being the most likely to fulfill this vision.

I believe the decentralization of Bitcoin remains unaffected. By definition, decentralization means that Bitcoin cannot be controlled by a single central authority. This implies that large institutions or entities have no say in how Bitcoin operates, including its blockchain and technical aspects.

While their actions significantly influence prices, as we're well aware, this is a normal phenomenon in economic markets. These large players cause price fluctuations, which can impact the market's significance. However, they buy and sell Bitcoin just the exact same way, we individual or small scale investors do through the market making us even

The only distinction between institutional investors and individual investors is the scale of their transactions. Institutional investors buy in bulk, potentially generating more profits as prices reach new levels.

Generally, prices are influenced by human activities, which is a natural aspect of any market. Therefore, there's no reason to fear that price fluctuations caused by big bodies will compromise Bitcoin's decentralization.

I understand what you are trying to pass across, and I believe others do, but my question still remains, is decentralization of Bitcoin tied to the network or the market?.

I definitely agree that more whales buying larger portion of the total Bitcoin can give them edge over others in terms of price manipulation, but that doesn't still put them in charge if we're to stick with what decentralization still means. Besides I don't think every whale plans on holding their Bitcoin forever. Some will definitely sell at some point thereby releasing it back to the market for others to buy.

Or maybe I still can't see from the angle you're coming.


My bad, I meant to say 3 million.

decentralisation is more about whom controls the rules of the network, and yes there is a controller(core)

but if you only want to talk about the market price manipulation. it can be solved, by not giving 3 main exchanges the popularity of centralising so much coin that the whales can then control the price.
it becomes harder to arbitrage and manipulate the price if there were more exchanges, and if those exchanges didnt allow instant transfers of reserves, (for the whales to set prices on one exchange to instantly impact and thus control the other exchanges)

thus achilles heel of whale manipulation is the centralised exchanges

..

right now we are seeing a great example of whale manipulation which released their walls of the $75k resistance at start of month, and now are using a newly implemented wall at ~$93k~$95k which they are using to stop the price naturally growing beyond the $100k price. as the whales dont want the 2025 ATH of above $100k to happen too soon

however there are actually 2 main groups of whales, those that released the $75k wall to allow the price to naturally grow because they want to start raising the price naturally to get profit sooner. vs another group that dont want the price to fully set a major ATH before 2025 because they dont want to claim major taxable profits for the december end of year tax deadline

I think in general you are correct that an excessively unequal Bitcoin distribution may lead to problems. However, as of 2024 this is more a danger "looming in the background" than a real problem. [1]

"Traditional" Price manipulation is not the main problem I'm seeing. Instead, if a new conflict about a development decision, like the one about Segwit/big blocks in 2017 happens, then whales could indeed try to position themselves in this conflict. This doesn't apply so much to ETF firms like BlackRock, because they are mere intermediaries of their customers. Independent holders like MicroStrategy, or nation-state whales (imagine the US buying a million coins) are more dangerous in this regard.

Imagine the following scenario:

- Developers plan a privacy coin function (let's say something like MimbleWimble introduced by LTC)
- The US government (if it holds large amounts of coins), Microstrategy, or whoever opposes this plan, buys trolls on X and Bitcointalk to support the position and tries to fabricate a debate about the "harms" of the privacy feature.
- An "independent developer" appears and creates a Bitcoin version without the privacy function, which would hard fork at a specific block (same as Bitcoin Unlimited in 2017)
- The whales say that they will support the branch without the privacy feature. This leads to fears that they could sell the Bitcoins on the chain with the privacy feature, and in consequence, the privacy feature loses support.

This is also the reason why I don't like the idea of governments buying too many Bitcoins. It would not do harm if they hold some as a strategic reserve, but they should never have excessive power. Nobody can stop them however, so it's the community who has to fight against that scenario.

The solution is actually that the community must uphold cypherpunk values also in the future (see @albertorma's post), to counter all these possible attacks by whales. Bitcoin is also a kind of social network, not only a technological solution; we shouldn't forget that, so the community does have some power too, not only the whales. It's the community who builds the "story" Bitcoin's success is based upon. And it must stay crystal clear that censorship resistance is one of Bitcoin's main features and never a development decision should be taken that harms this.

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[1] In the case of Bitcoin, at least; many altcoins instead have indeed problematic levels of power concentrations, often in the hands of the "developer" team.

take this scenario
coinbase custodianise blackrocks coin, which allows hundreds of millions of share holders to have exposure of bitcoin price via indirect shares, and then coinbase also being a popular actual bitcoin exchange for 100m customers.. so they also have alot of lumps of sats of millions of others(couple million btc)..

and so, for hundreds of millions of people to stay connected to their deposited coins they follow the protocol coinbase chooses to follow because when people want to withdraw they want to see their coin move on a particular network that coinbase broadcasts to

EG if coinbase only broadcasts a withdrawal to fork #upgrade4 but does not broadcast withdrawal to fork#1-120000, then everyone ends up following #upgrade4

this is the whole "economic node"(popular exchanges/services) control. whereby mining pools are swayed to follow the economic nodes consensus to ensure they can communicate their blocks(and rewards) to exchanges that will accept their blocks(and rewards)
..user nodes(not economic) then just sheep follow the economic nodes to be able to receive the withdrawals from exchanges/popular services

so when the economic nodes collude in their own ENSF using 'uasf' (but that was a lie because users didnt get a vote only economic nodes did in 2017) they can blackmail the mining pools to make blocks in the prefered version or have their old blocks rejected and treated as a altcoin(research: NYA)

All these in cryptocurrency can be termed as market manipulations, but do you now know the beauty part of this, there is no one single whale in the crypto market, if one is doing the market manipulation, then the impact is affecting another whale over there massively and going on loss, this makes it more of being in an equal equilibrium position, whereby any of our actions towards the investment or crypto market will yield to a negative experience on other investors and same from theirs, when they acted, it also affected us in some ways, but we should never forget that this same power or influence is not vested on a particular entity or group of people, everyone can just get into it and play safe as he can, because the network will always remain being decentralized.

Exchanges with too big holdings may be more problematic than spot ETFs, because spot ETF firms have to do what their customers say who are the legal owners of the coins.

However, I think in the case of such intermediaries, there is still less danger than with single individuals or businesses which are not intermediaries but have full ownership of their coins.

In the fork scenario you detailed, customers not supporting the exchange's policy could still exit the system withdrawing an altcoin for example, or directly go to fiat. However, I don't think there are many incentives for exchanges to not offer all popular forks to the customers. They risk not only the loss of customers, who will withdraw their coins as soon as the "only one fork" policy is announced, but even may face legal action if they act against their own TOS. And as we have seen with Bitcoin Cash, most exchanges will happily add both forks so they can charge fees for trading between them.

Of course, if the customers are passive and don't care about the development decisions -- and that's the danger I wanted to highlight -- exchanges could be tempted, in the long run, to indeed try to profit from one or another way from a fork, for example declaring the hardfork coins with the feature they don't support as "worthless" and selling them secretly. That's why I think the community's behavior is important here: they will take damage if they do this while the community is "woke" ( ;) ) about major service providers respecting the ideals of Bitcoin.

firstly, look into the NYA clan of economic nodes in 2017 and look at their block rejecting blackmail message and which path of which protocol they broadcast to, accept blocks of...

secondly in regards to the ETF.. share holders have NO ownership claim of btc.. yes blackrock(the company) has the claim of coin held by coinbase and thus have some sway in regards to coinbase, yet if you read the terms and conditions of blackroacks ETF filings(they will follow certain economic majority protocol) and then read coinbases commitment as a custodian where they dont have to inform blackrock of all security procedures and decisions.. it becomes more enlightening that coinbase can actually make more decisions than blackrock can
yes blackrock and other whales can log into coinbase and sell the BTC for fiat/altcoin and then stable coin it to another exchange and then vault it up with someone else, but that in itself is another SEC filing requirement and also a due diligence test on the other exchange and requirement of the other exchange to meet certain SEC regulations.. so its not a simple one day event of withdrawal and deposit of funds. so again this can give coinbase more ammo to change things and people just end up following blindly as its the least hassle path..

much the same as how many peoples human/constitutional/basic rights are being weakened and eroded based on peoples preference for a easier/less hassle life. when defending your rights becomes a burden, they would rather let their rights get weakened if it meant carrying on without the extra burden to protect their right

The fact that a certain group of people have more Bitcoin than others does not affect Bitcoin's decentralised feature in any way. Even if they hold 90% of the bitcoin in circulation, bitcoin is still a decentralised coin in the sense that they're not the central entity that holds and controls the coin, the market still does.
Yeah, it's true that they may have the power to manipulate the price of the coin, for example when the German government sold off their 5000btc a few months ago, the price of bitcoin dipped a little. If Telsa to Black Rock announce that they've decided to sell their bitcoin now, the price of bitcoin might take a little hit, but here is why bitcoin is unique, this price change only lasts for a relatively short period before it starts correcting.

Over the years, I have discovered that every price change in bitcoin that happened due to a manipulation mostly always corrects itself, but when the price goes up or down organically, it stays that way for much longer. 

The point is that decentralization doesn't eradicate the possibility of manipulation. Someone owning a large share would be able to move the market up or down by using the share they have to dictate the price temporarily, but that doesn't mean the asset in question isn't decentralized. The concept of decentralization isn't directly connected with the price of an asset; it has a direct connection with transactions and blocks, which are decentralized; no one has any control over the network, even the whales having a large share of the total circulating supply.

Whales can manipulate Bitcoin's price, but its decentralization stays intact because having a significant share doesn't give them the right to have access to the blockchain but only to the market.

I think you made a typo error here ;) because no one can own 30 million coins since it's more than the market cap.
[/quote]

I think you made a typo, too, because 21 Million is the total supply of Bitcoin and not its market cap.  ;)

Whales and Big Firms make huge investments, such as those recently into Bitcoin ETFs and mining. They can move the price noticeably, but that in itself does nothing to undermine Bitcoin's decentralization, which protects against any singular entity controlling the rules or transactions of the network. When decentralized, it speaks of governance and protocol security, this remains intact regardless of economic disparity.

In addition, large institution involvement may bring long term stability to Bitcoin and benefit the retail holders by reducing volatility. Whales have market influence, but they cannot change the basic rules of Bitcoin, like the supply cap of 21M that sustains the decentralized nature of Bitcoin. Bitcoin's design balances open access with inevitable market dynamics.

This scenario wouldn't play out like this. We don't have a globally functioning equally applying legal framework because harmonization across boarders has turned out to be impossible on a global scale. There are too many different types of governments like democracy, oligarchy, dictatorship, communism, etc. And with every different type comes a different set of incentives that gets actors to choose a different course of action. The same applies to either whales or as lined out in the example, to various governments holding a lot of Bitcoin. Let's say all the whales combined hold 7,000,000 Bitcoin.

- How would they coordinate the sell-off without harming each other?
- How would they mobilize the masses to support the fork without making their decision public, thereby causing the masses to panic, sell-off their Bitcoin in no time and harm the current holdings of the whales?
- How would whales secretly sell off their holdings if those represent a lion share of Bitcoin holdings, now flooding the market with supply?
- How would Russia and China react in response to the USA and Europe?
- Since when can entire networks be forked? I know that blockchains can be forked, but not the people behind it.
- Can't someone fork Bitcoin, introduce the privacy feature in the fork and then see whether people make their own decision and support the fork with either 10%, 20%,... 100% of their investment dedicated to Bitcoin?
- Would pure speculation on the "original" fork spur a counter effect such that FOMO begins right after an initial sell-off?

If whales hold a lion share of the Bitcoin supply, I am sure they would be very careful about announcing their stance that could potentially lead to a panic sell-off among the retail investors. By the way, they could do it regardless, enjoy the sell-off in order to gobble up even more supply of the branch that out of a sudden they now decide to support.

There is so much game theory involved and since Bitcoin is not a regional or national thing, a coordinated sell-off threat won't happen and if it does, any losses in either trust or financially will outweigh any gains. Bitcoin is too big to be manipulated this way and in any other way. From an investor's point of view it doesn't matter whether Russia or the USA give additional value to whatever Bitcoin version and if one country prohibits something that the majority of people desires, an opportunity opens up for another country. It will forever be like that.

Decentralization is not an end in itself. It serves Bitcoin's main purpose - cash-like on-line transactions. To be cash-like, Bitcoin was implemented as a decentralized network of nodes. To be reliable, each node independently verifies every transaction before committing it to the permanent transaction history. Without cooperating, every node makes exactly the same judgment about every new block and all the block's transactions. There is no democracy, no voting. As long as all nodes arrive at the same transaction history, Bitcoin keeps working. Bitcoin even tolerates some nodes diverging from the common transaction history. Those nodes cease to participate in Bitcoin. The Bitcoin network operates as a supermajority - every node independently discovers the same transaction history

The Bitcoin price market, and the distribution of ownership, are separate from Bitcoin. Nothing in the code which runs a Bitcoin node has any control over who owns what quantity of Bitcoin, or how much fiat money was used to buy it. These markets may or may not be corrupt, or may become corrupt in future. Bitcoin does not care. Nobody who operates a Bitcoin node would ever demand that Bitcoin's node software should be modified to prevent price manipulation or concentration of ownership

The other side of decentralization (and the supermajority) is that every software change must be adopted by every node. Or, enough nodes must upgrade to accept a software change such that Bitcoin is still effectively decentralized even if its node network shrinks substantially. This is a disincentive to making changes. The most recent urgent change was in 2013, when the network was still small enough to be considered centralized

Thanks for your post! I think this is the main question behind all the other questions.

My worries are mainly based on the discussions in 2017 about Segwit and big blocks. I think this scenario back then could have played out in a different direction if many of the original cypherpunks didn't warn against the danger of a decision to allow bigger and bigger blocks, which would have harmed decentralization a lot because the access to a full node would have been reduced to rich people and businesses (Solana is a real-world example with 128 to 256 GB RAM minimum).

If we look at the market capitalizations of Bitcoin and BCash today (around 20:1), then we could say that the decision pro Segwit was very clear. Back then, my impression was however that the community was far more divided. For example in the Spanish forum we had a mod supporting big blocks who now unfortunately left the forum it seems. I don't think we had a big blocker majority back then but it was perhaps 55:45 or at most 60:40 in favour of Segwit and small(ish) blocks.

This means that without the fight of the small blocker camp, the Bitcoin protocol could have "tipped" in either direction.

You are correct that it's difficult to coordinate a big set of whales and there are also "geopolitical" questions involved. But let's look at the question of privacy features specifically. The EU has set up the AMLR which restricts the possibilities for EU exchanges to offer accounts in privacy coins from 2027 on.

Now imagine that such a law/regulation, or similar laws in different countries (privacy coins are for example also restricted in other states like the UAE), could threaten to be applied to Bitcoin due to a new privacy feature. This could be opposed by a large amount of whales: Government whales, because they may support the anti-privacy stance, and private Saylor-style whales, because it could harm Bitcoin's price growth because there would be less exchanges offering it. If Ethereum for example stays "compliant", i.e. don't introduces privacy features, then these whales could fear a BTC->ETH flippening. Or to SOL or whatever "gov-restriction-friendly" coin.

We can imagine that the community, for exact the same reasons, would be also divided on the issue. The "anti-privacy" camp could be very close to 50%, because either they believe criminals could benefit from the feature, or because they fear a flippening to "compliant" altcoins.

In such a situation, we have a force of coordination which applies to most whales (the potentially lower ROI). So there is an extremely high probability that several whales will coordinate and invest in a propaganda campaign much bigger than the 2017 "big block campaign". They only need to achieve to surpass a "tipping point" against the support of the privacy feature. And if they win and the fork gets rejected, the "privacy fork", even with considerable support in the Bitcoin community, could see a bleak future, like BCash or also ETC today. The ETC case is also quite interesting because in this case it was the "original chain" which lost the battle.

In 2017 we had already a "fork of networks", not only of the blockchain, with one side clearly winning (and the other "fork" of the "network" losing a lot of support but still active, see /r/btc for example), and this could repeat itself.

I don't say that this has to play out this way. However, the community should be aware of that possibility. The more Bitcoin is seen as a lucrative investment vehicle instead of an anti-censorship decentralization effort, and the less popular the "OG cypherpunks" are in the community, the more we have to fear that a manipulation attempt like described above could work in certain situations.


@franky1: You won't believe it but I mostly agree with your post, I have to look however into the details of the agreements between Coinbase and BlackRock.

I think there is no contradiction between the Bitcoin network and the Bitcoin market, they are separate entities that have their own purposes.  The thing that happens in the Bitcoin market does not constitute what happens to the Bitcoin network.  We all know that the Bitcoin network is the infrastructure that validates the transaction while the Bitcoin market is the environment where Bitcoin is traded or sold/bought.


That is what I am saying, the holdings of an individual or group has nothing to do with the infrastructure of the Bitcoin network.  Bitcoin's decentralized structure is not affected by any individual or group that has huge holdings of Bitcoin.  Bitcoin isn't like any POS coins/tokens where the amount of coins being staked/held in the wallet has direct effect on the network infrastructure due to the design of the consensus infrastructure.


This is a very clear explanation/example why the individual holdings no matter how huge has no influence over the network, it has an effect only on the market.

Or better say that each things has their own advantages and disadvantages. Decentralization is the main feature of BTC. It allows people to be anonymous and free but its disadvantage would be is that there are lots of criminals involved here and once we got victimize like we get robbed, there is no way for us anymore to recover our money. In cryptos, it all started with decentralization and BTC is the coin that has this feature. Centralization in crypto have only come eventually. So it is a disrespect if we kicked out BTC only because there are more centralized cryptos out there. In fact, that makes it more unique and that gets it a good number of demand.

It’s called decentralization because of how the network operates, and it doesn’t depend on how much one person holds, even if they control 50% or more of the supply. The real challenge lies in adoption. Investors who have the power to manipulate the market shouldn’t do so, as constant price swings, whether up or down, are bad for adoption. Right now, only mostly investors and traders benefit in this speculative and highly volatile market, and that volatility needs to decrease over time for broader acceptance.

As for the example of holding 50% of the supply, well that might not happen as I don’t think any investor ( individual or institutional) would risk such a massive amount, and even though Bitcoin has reached this level of prominence, it’s still considered a high-risk investment. Any sudden dump could trigger panic among investors. That’s why we need institutional investors, but they should hold a balanced share, not so much that one or two players can dictate the market.

Take BlackRock with their ETF, for instance. They hold a significant amount of Bitcoin, but they can’t influence the market since what they hold doesn’t give them the authority to sell or manipulate its movement. This is the kind of institutional involvement that can help stabilize the market while maintaining its decentralized principles.

Definitely it would because when  power is given, nomatter how genuine an authorized entity would be, there must still be that perceive tendencies over their crowns to subject the industrial layout of the Bitcoin market on how they would be favoured in regards that every holders are aimed to make profits and increases their portfolios.
Then politics might be implied alongside.

There is every possiblities that the market volume can be manipulated to their favour as whalers maybe applying irregular halving event where they can buy bigger value of Bitcoin and then lobbies for an ETF to trigger the point of market increase where they would make hugely sufficient incomes in returns.

About the Blockchain security network, of course it would be tightened because they would either don't want to be catched up by a third parties.
Do not underestimate the power of authority because it central of attractions can be of selfish governance.

So therefore, it would be flawed to an extend as said but not extremely flawless.

You actually have a solid explanation here and from the context of what you wrote you seem to understand exactly where this topic is driving in the first place. Ownership and power control might just be the flaw of decentralisation because it can be abused in context , used for selfish driven acts.  From your write up you made mention of government having huge chunks of bitcoin especially coins they seized. Yes they can't Centralised the network because of the way it's built , but their hodlings in relation to the total supply gives them and stronger edge on the network.

Take for example the government seized 4 million BTC now probably at some point in the future, they give news that they would be selling off a huge part of that stack. What happens? FOMO!! which is literally one of the things that gives these big firms and the government an edge to influence and manipulate price. When they make such news scared HODLERs rush to sell making price to drop massively most times.