Bitcoin & Centralization

[MarioV]

But are you talking about bitcoin or Bitcoin? Because it is very easy to confuse and not to distinguish between asset and protocol: they are two distinct things.

[1714964047]

1714964047

[The Sceptical Chymist]

People having a lot more bitcoin than most of us =/= centralization

That's exactly what I'm thinking.  Ownership doesn't come into the equation when you're talking about decentralization--with bitcoin, it means that many miners are responsible for creation of coins and maintenance of the blockchain.  None of that depends on banks or governments.  That's my understanding anyway.  Bitcoin is as decentralized as a currency can get, even if its price (which is a separate issue) could be manipulated by whales.

Yeah, these whales do manipulate the price. But not always.

That's what a lot of people say, anyway.  But nobody can ever point to exactly who these whales are or what the manipulation is.  It almost gets into tinfoil hat territory IMO when people start ranting about those whales.

[webtricks]

There will always be poor, rich and ultra rich people no matter what currency are we going to use. However decentralization in Bitcoin is about not being controlled by a central entity. For example the Feds can increase the supply of US Dollar indefinitely. Also they control how much liquidiry is poured into the market, etc.

Well, you are partially countering your own argument.

If I have lots of Bitcoins (say, 5-10K), I can easily control the liquidity in the market.  I can easily fake pump/dump by choosing any single exchange and that will manipulate the whole market.

That's the current misery with Bitcoin. Although the Proof of Work algorithm ensures its fair-working as a currency (since lots of nodes already ensuring decentralization of chain's instance) but 'Bitcoin as an investment' is still prey to the early holders. That's what make Bitcoin a risky investment and main reason why it is referred as Bubble by many experienced investors.

[TIDOVEE]

Most of the times what make bitcoin decentralized nature appear blur is due to the selfishness of some whales, governments and even some of us. Many whale's transaction activities are without the considering of others and therefore erupting manipulations,  the government policies too such as  tax deduction, which should not be a bad idea any way but tend to lead to ban when it is not at their exact will.
Many of us too who refuses to release the little that is right to the government are also a factor.

[Youghoor]

While most people tend to market bitcoin as being anti centralization, anti govt. so on and so forth, it occurred to me that it might just be centralized too. Seemingly we still have whales out there hoarding not just 1 5 or 10 bitcoins and its many many forks mind you (free Extra money) but with thousands upon thousands of bitcoins. So in all of this it's kind of a scary dilemma. What are you thoughts and comments on this seemingly true fact? Thoughts and comments are more than welcome.

I think you don't  really understand what centralisation and decentralization actually means. Decentralization is the crypto space means no one controls the amount of transactions made by an individual within a day and the amount of funds the person is sending. Decentralization means financial freedom. You should also know that decentralization is cause the frequent change in the market value of most cryptocurrencies since the decentralized nature causes people to determine the market price of a particular coin. 

[crwth]

It's not centralized, and it's nowhere going to be. You may think that, but everyone else had that opportunity to get some Bitcoins in insane amounts when you got in it earlier than the others. You could've mined that too if you had the time to discovered Bitcoin more previously. It's lucky timing with their holdings, and I don't think it's going to be scary knowing that there are those kinds of distributions. There's nothing you could do but continue your own business, right?

[adeandro]

Decentralization is unfortunately impossible in modern conditions, so bitcoin is likely to be centralized.

[Artemis3]

There will always be poor, rich and ultra rich people no matter what currency are we going to use. However decentralization in Bitcoin is about not being controlled by a central entity. For example the Feds can increase the supply of US Dollar indefinitely. Also they control how much liquidiry is poured into the market, etc.

Well, you are partially countering your own argument.

If I have lots of Bitcoins (say, 5-10K), I can easily control the liquidity in the market.  I can easily fake pump/dump by choosing any single exchange and that will manipulate the whole market.

That's the current misery with Bitcoin. Although the Proof of Work algorithm ensures its fair-working as a currency (since lots of nodes already ensuring decentralization of chain's instance) but 'Bitcoin as an investment' is still prey to the early holders. That's what make Bitcoin a risky investment and main reason why it is referred as Bubble by many experienced investors.

But it doesn't work that way, because the moment you try, you will find your operations don't execute instantly for the entire amount. The capacity for whale manipulation is lower than some people think. This is why this "misery" doesn't even exist.

Wealth distribution is unrelated to coin centralization, that is a fact. No one can destroy Bitcoin overnight, like governments, banks, wars, etc can with fiat. Those that invested earlier, profit the most, and there is no turning back. Bitcoin is no longer something to make money by just buying and holding, that stage is already gone. It is a coin that keeps its value over time, that's its intended purpose, and thanks to its design, its smoothly entering this stage.

Before Bitcoin the world did not have this kind of coin, now it does. Even if you (like me) missed the early days, we can still use it to at least preserve what little wealth we may have up to this point. Should you keep it in fiat, you risk losing it overnight.

Suppose a catastrophe (natural or artificial) happens in your country tomorrow, if you had moved all your money into Bitcoin, your wealth would have been kept safe even if everyone else around you enters misery due to the fiat/economy collapse. But this is a decision you can only take BEFORE it happens (even if it never happens). Once it happens, it is too late to react. The smart investor would simply diversify, just in case. It is foolish to trust your government or your central bank, especially when you know they have the power to make you poor overnight.

[mrquackquack]

Well somewhat of an off subject comment but it's almost weird to conceive that digital money isn't higher than what it is when governments can print whatever they want basically whenever. Aren't people kind of suspicious of this? Also whats going on with the Dow Jones? Has anybody looked into how high it has gone in the Donald Trump Presidency? Wow, I'm loving the pump don't get me wrong but WOW..

[Wintersoldier]

While most people tend to market bitcoin as being anti centralization, anti govt. so on and so forth, it occurred to me that it might just be centralized too. Seemingly we still have whales out there hoarding not just 1 5 or 10 bitcoins and its many many forks mind you (free Extra money) but with thousands upon thousands of bitcoins. So in all of this it's kind of a scary dilemma. What are you thoughts and comments on this seemingly true fact? Thoughts and comments are more than welcome.

I think you misinterpreted the meaning of centralization but in some points are true, because being decentralized in bitcoin is having the freedom for a person to have their bitcoins and to avoid being controlled by any third parties, but thinking deeply about being controlled, in market, if we indulge ourselves too deep to earning profit, we could still be controlled by the whales who set the market price of bitcoin, though, in fact, we really have the freedom on deciding what to do to our bitcoin. So to avoid being confused, these technical terms should remain properly used, or explain further to avoid misconception.

[kryptqnick]

While most people tend to market bitcoin as being anti centralization, anti govt. so on and so forth, it occurred to me that it might just be centralized too. Seemingly we still have whales out there hoarding not just 1 5 or 10 bitcoins and its many many forks mind you (free Extra money) but with thousands upon thousands of bitcoins. So in all of this it's kind of a scary dilemma. What are you thoughts and comments on this seemingly true fact? Thoughts and comments are more than welcome.

I don't believe that whales manipulate the market. I remember something about the first 100 richest addresses having the vast majority (90% or something) of BTC. However, most of these addresses don't belong to people, they belong to exchanges and other crypto companies. They move money sometimes, but it doesn't affect the prices. And this is still a big amount of people that would have to agree to make a big move, often without knowing who is who (we don't know to whom some addresses from the list belong).
Bitcoin is thus but centralised, at least not in terms of coins distribution. Mining is, and it is a bit disturbing, but it's a suicide for a mining company to attempt to affect the market.

[crossabdd]

 actual information referred to in decentralized system on bitcoin is not from who holds most bitcoin. or whales that have thousands of BTC. but more than a personal control center. Bitcoin does not have a central control. but every bitcoin holder is in control of their assets. no matter they have 1 million BTC or 1000 satoshi. full control is in the holder. as well as privacy, large transactions. all not monitored by the government. all transparent, but there is no centralization of the middle man. all goes under personal control. so this is purpose of decentralization. if it's about price. then all crypto is in whales centralization. it's not about price alone. but more on benefits and uses.

[hatshepsut93]

People often talk about whales as if it is some hivemind that manipulates Bitcoin and can even control it, but it's far from the truth. Whales are individuals, many of them probably don't know each other, many of them are probably anonymous, and they can have very different views on Bitcoin - some might fully believe in its cause, others might be just here for profits, some think how to short it, others want to buy more and so on. So, I'm absolutely not concerned about whales being a centralizing factor in Bitcoin.

[blckhawk]

Centralization to me is not within the shareholders, but instead in the nodes that run the network, which is.more of a concern to me rather than these whales. China has established a centralized network of nodes, consisting of more than 50% of the network. And outright ban by the Chinese government would bring adverse impact on the market, regardless of these whales.

[Wind_FURY]

While most people tend to market bitcoin as being anti centralization, anti govt. so on and so forth, it occurred to me that it might just be centralized too. Seemingly we still have whales out there hoarding not just 1 5 or 10 bitcoins and its many many forks mind you (free Extra money) but with thousands upon thousands of bitcoins. So in all of this it's kind of a scary dilemma. What are you thoughts and comments on this seemingly true fact? Thoughts and comments are more than welcome.

I already said this before, but if financial institutions, exchanges, and custodial services control most of the coins in circulation, then Bitcoins as a permissionless, censorship-resistant cryptocurrency would fail.

[sovie]

Bitcoin market is not only about trading where whales or people who owns massive bitcoins are ruling, its a complete financial ecosystem where everyone has complete control of his funds. Crypto exchnages are no way decentralized rather they are centralized too. Do not look at bitcoin only from perspective of buying high and selling low.

[bitvalak]

It seems you misinterpreted decentralization and centralization.
What you're describing is capitalization, where anyone who has a lot of bitcoin can control everything about bitcoin.
Though it's not like that, even if you have hundreds of bitcoins it will never happen like that because bitcoin doesn't depend on anyone. There is no third party that can intervene in your bitcoin assets.

[chaoscoinz]

I really don't think that Bitcoin is centralized yet it  is the mining share that has become centralize instead, because in order to really mine you need a warehouse of rigs just to make a good profit. Early birds who got within mining early on happen to culminate the field and they took over. This is way back when people were scared of a 51% attack. This is the sole reason I believe another cryptocurrency will eventual be poised to replace Bitcoin as the gloabl cryptocurrency, being that the Proof of work algorithm has been rendered outdated and rather costly to continue it's use. More Eco friendly and simpler algorithmic consensus solutions have been achieved like "Delegated Proof of Stake".

[Lanatsa]

While most people tend to market bitcoin as being anti centralization, anti govt. so on and so forth, it occurred to me that it might just be centralized too. Seemingly we still have whales out there hoarding not just 1 5 or 10 bitcoins and its many many forks mind you (free Extra money) but with thousands upon thousands of bitcoins. So in all of this it's kind of a scary dilemma. What are you thoughts and comments on this seemingly true fact? Thoughts and comments are more than welcome.

Having some whales doesnt signify centralization.It isnt really that equal nor a valid presumption.
There would be always people who would really have much more coins that on other people since we
know that we do differ when it comes to financial capacity.Jelousy isnt a bad thing but we shouldnt
conclude about centralization even though these whales can affect price but doesnt mean they can
control the entire market as they like.

[Wintersoldier]

I really don't think that Bitcoin is centralized yet it  is the mining share that has become centralize instead, because in order to really mine you need a warehouse of rigs just to make a good profit. Early birds who got within mining early on happen to culminate the field and they took over. This is way back when people were scared of a 51% attack. This is the sole reason I believe another cryptocurrency will eventual be poised to replace Bitcoin as the gloabl cryptocurrency, being that the Proof of work algorithm has been rendered outdated and rather costly to continue it's use. More Eco friendly and simpler algorithmic consensus solutions have been achieved like "Delegated Proof of Stake".

In addition, having this consensus is quite obsolete as you said to the point that many cryptocurrency is already utilizing more efficient consensus that they are using to efficiently generate transactions which mainly attracts more users to adopt to that particular currency. In my opinion, bitcoin being centralized is just based from the market manipulation which in the first place, indirect centralization because they really not control the funds you have. Thus, allowing you to freely decide for your choice.