What if they centralized Bitcoin?

[hd49728]

Today, Bitcoin is simply an investment and value store, not a "currency" for most of its users.

People have freedom to use their bitcoins in any way they want, investment, store of value, currency, payment method, gambling mean, whatever.

Today, most holders of Bitcoin do so in a centralized way, e.g. with a broker or an app.

Again, there is freedom for people to choose what they do like where do they store their bitcoins.

Bitcoin was created by Satoshi Nakamoto with a core idea, to give us private keys that help us to have our own bitcoin banks. With private keys, we actually owns our bitcoins. So if people decide to use centralized exchanges, they don't have private keys, and only have public addresses.

If they accept risk, they have freedom to store their bitcoins on centralized exchanges. We can not ask them to do anything and only can give them advice.

Reminder: do not keep your money in online accounts

[BALIK]

What if they centralized Bitcoin?

Nothing will happen to bitcoin because bitcoin will never become centralized, I have never thought of this and believe this will never happen. Don't waste time making assumptions and scenarios that will never happen. Instead, focus on doing your job well, spending your time earning money to accumulate as many bitcoins as possible. Because as the price of bitcoin increases, everyone will enjoy the profits they make, while you continue to needlessly doubt the future of bitcoin.

[Sebas.tian]

Let's get to the point if Bitcoin is centralized, no one will use Bitcoin anymore or invest because they know it is centralized and anyone can easily manipulate the network or even the price.
So for me, it is an easy answer. Bitcoin has value right now because it is decentralized because if not, there are lot of alternative to use it.

That is why Bitcoin will remain decentralized forever, because the government don't have the capacity to make it valuable like the way it is now, that is making countries to begin to adopt it for their citizens to have access to it and to use it to boost their economy that is trying to collapse. Assume Bitcoin is a centralized currency, it would have be dead by now, because government officials that will be in charge to control the price of Bitcoin would have use it to grow their family wealth and gather all the wealth that will make them wealthy without considering others people using it in the country. The first country that made Bitcoin legal tender, tested the value of Bitcoin and it has created potential things in their country that is making foreign investors to use the advantage to grow their investment and bring development to the country also.

[legiteum]

All you mention are facts, but it still doesn’t stop the major fact that Bitcoin is decentralized.

Well, Bitcoin is... whatever the core devs say it is. If they wanted to move Bitcoin to a centralized model, they could. It doesn't matter what it is today.

I think that changing its architecture to a centralized one would not be that easy - both technically and politically - and I'll tell you why: a change like this would require consensus and if consensus is not reached you'll get a hard fork, i.e. an altcoin, losing all the "magic" that comes with being the actual Bitcoin.

Consensus among... whom? I'll confess here that I actually don't know the details about how the Bitcoin core dev team decides what to do.

What if they centralized Bitcoin?

Nothing will happen to bitcoin because bitcoin will never become centralized, I have never thought of this and believe this will never happen. Don't waste time making assumptions and scenarios that will never happen. Instead, focus on doing your job well, spending your time earning money to accumulate as many bitcoins as possible. Because as the price of bitcoin increases, everyone will enjoy the profits they make, while you continue to needlessly doubt the future of bitcoin.

But if all you care about is the price of Bitcoin going up, and centralizing it could vastly increase it's accessibility, and therefore greatly increase it's price, then why would you be against it?

And if there are billions of dollars to be made in Bitcoin if the price goes up, why would you assume this could never happen?

[davis196]

Today, Bitcoin is simply an investment and value store, not a "currency" for most of its users.
Today, most holders of Bitcoin do so in a centralized way, e.g. with a broker or an app.
Bitcoin has failed its original purpose of being able to thwart government subpoenas since it is subject to chain analysis (and hence has opened the door to competitors like Monera for this niche need).
Bitcoin could never become a mainstream currency since it was intentionally designed to be slow and expensive.
With so much adoption and awareness from its popularity as an investment instrument, Bitcoin could become a mainstream worldwide currency if it were made to be fast and cheap, allowing it to be used for everyday transactions e.g. a parking meter or a cup of coffee.
Mainstream adoption of Bitcoin like this would probably send the price of Bitcoin into orbit.

Nobody says that Bitcoin is perfect(maybe with the exception of a bunch of delusional Bitcoin fanatics).
It's a fact that the current state of Bitcoin is different than Satoshi's vision about a peer-to-peer currency. I don't see this as a problem.
There are centralized altcoins with bigger supply and less scarcity. Are they better than Bitcoin? No. Did they achieve mass adoption? No.
A centralized coin with a simplified protocol would be basically "fiat 2.0" disguised as a crypto. Do we really need this?
Bitcoin was never intended to be a competitor of Monero. The transparency of the blockchain is a positive feature, because it creates trust among the newbies.

[Plaguedeath]

If you're a president: Will you let people to use Bitcoin instead of fiat? the more people abandon fiat, the more chance banks will fall and it will affect the economy. Will you let your country to bankrupt as people use Bitcoin to evade tax?

If you're a citizen: Will you use Bitcoin for every transactions if it were fast and cheap (Layer 2)? when there are other payment method that offer promotions e.g. credit card, digital fiat etc?

[legiteum]

There are centralized altcoins with bigger supply and less scarcity. Are they better than Bitcoin? No. Did they achieve mass adoption? No.
A centralized coin with a simplified protocol would be basically "fiat 2.0" disguised as a crypto. Do we really need this?

Well, I guess it depends on who you mean by, "we".

Based on what we can observe from the current state of Bitcoin holders, probably 90% or more of Bitcoin holders use an app or a broker or the ETF. In that case, they would not be able to tell the difference between centralized and decentralized since their holding is by definition centralized in any case.

Bitcoin is the most popular digital currency right now because it's name is "Bitcoin": people are buying a brand, or a meme.

I agree that for a small number of people, a centralized Bitcoin would be something they would not want, but the market seems to be saying that most people would actually want that very much.

Bitcoin was never intended to be a competitor of Monero. The transparency of the blockchain is a positive feature, because it creates trust among the newbies.

Well, since Monero came long after Bitcoin, you are obviously right.

The entire notion of P2P was invented in order to create a system to allow activity that could not be traced to a specific person who could be subpoenaed or prosecuted. This was the genesis of things like Napster, BitTorrent, TOR, and then eventually Bitcoin. The whole point of these systems was to allow things to happen that couldn't happen in a centralized server that could be traced to an individual or company (although yes, Napster had a central directory, which is why they were eventually put out of business).

Satoshi correctly pointed out that P2P networks actually held up over time and resisted governments--so he applied the idea to a currency and blockchain was born.

But after Bitcoin was invented, chain analysis was invented, which detracted from Bitcoin's original purpose. To answer that problem, people invented Monera and others like it.

I'm not sure how this all relates to our original topic here, but it's an interesting aside .

The more people abandon fiat, the more chance banks will fall and it will affect the economy.

That simply doesn't follow. Banks would do just fine with Bitcoin, and lots of financial institutions are already creating services around Bitcoin just like they do with sovereign currencies.

Will you let your country to bankrupt as people use Bitcoin to evade tax?

People already use physical cash to evade tax, as well as all kinds of other things.

If you're a citizen: Will you use Bitcoin for every transactions if it were fast and cheap (Layer 2)? when there are other payment method that offer promotions e.g. credit card, digital fiat etc?

Credit card transactions involve an exchange of personal data, which is undesirable for small transactions. (Even though it's actually desirable for large transactions, which is something I call the Anon Paradox).

I actually think consumers really want a payment mechanism that works just like cash, but in the digital realm. This is what many people thought Bitcoin would be, but it never worked because it's not geared to be mainstream. Right now there's no way to pay for things anonymously without resorting to slow/expensive/complicated cryptos.

[Z390]

Maybe the government should hunt down Nakamoto and force him to change some codes in the Bitcoin Network if possible, neutralizing the decentralized part and making it centralized, or the government should take over the whole mining hashrate and start attacking Bitcoin Network? I am just trying to give you what they could do. Unfortunately for them, it is impossible.
What many people don't know is that Satoshi knew that all these is coming, he is a smart creator, Bitcoin itself is decentralised and untouchable at this point of time, the only way the power entities have left is a centralized exchange, and the Bitcoin investors and traders still can't do without centralized exchanges that's why I keep saying that using centralized exchanges to trade your Bitcoin is a wrong way to use a decentralized digital currency.
Bitcoin is not perfect, it has its flaws but the decentralized part just work very well, there are other centralized coins out there and people are still investing in those coins, if the government want to take over they should go after centralized coins, Bitcoin is a peer to peer digital currency, if there is a way to make Bitcoin a centralized coin they would have done that already.

[retreat]

• Today, Bitcoin is simply an investment and value store, not a "currency" for most of its users.

That's what is happening now, where more people prefer Bitcoin as an investment asset compared to digital currency. However, just because many people prefer to treat Bitcoin as an investment asset, it does not mean that Bitcoin loses its main purpose of being a decentralized transaction system, because in fact many people still choose to make transactions using Bitcoin since it is much easier, secure, and does not require identity.

• Today, most holders of Bitcoin do so in a centralized way, e.g. with a broker or an app.

Because many Bitcoin holders don't realize that when they store their assets on an exchange, they lose access to control over it. It does seem to make things easier for users, because they can trade and use their crypto assets directly from the application, but without them realizing it, the numbers in the application are only a representation of the assets owned by the user, while the real assets are in the exchange wallet. And because of this, users lose their access to fully control their assets and whenever the exchange wants they can use these assets without the user knowing.[/list]

[legiteum]

Maybe the government should hunt down Nakamoto and force him to change some codes in the Bitcoin Network if possible, neutralizing the decentralized part and making it centralized, or the government should take over the whole mining hashrate and start attacking Bitcoin Network? I am just trying to give you what they could do. Unfortunately for them, it is impossible.
What many people don't know is that Satoshi knew that all these is coming, he is a smart creator, Bitcoin itself is decentralised and untouchable at this point of time, the only way the power entities have left is a centralized exchange, and the Bitcoin investors and traders still can't do without centralized exchanges that's why I keep saying that using centralized exchanges to trade your Bitcoin is a wrong way to use a decentralized digital currency.
Bitcoin is not perfect, it has its flaws but the decentralized part just work very well, there are other centralized coins out there and people are still investing in those coins, if the government want to take over they should go after centralized coins, Bitcoin is a peer to peer digital currency, if there is a way to make Bitcoin a centralized coin they would have done that already.

The core devs of Bitcoin could change the code base any time they felt like it.

And yes, people using centralized apps and brokers is "wrong" according to the original religion of Bitcoin, but guess what: most people use Bitcoin that way today.

So maybe the religion is... dead?

And my hypothetical here is not "the government" (which government?) being the central entity that runs Bitcoin's servers, but the central authority that controls the code base now.

• Today, Bitcoin is simply an investment and value store, not a "currency" for most of its users.

That's what is happening now, where more people prefer Bitcoin as an investment asset compared to digital currency. However, just because many people prefer to treat Bitcoin as an investment asset, it does not mean that Bitcoin loses its main purpose of being a decentralized transaction system, because in fact many people still choose to make transactions using Bitcoin since it is much easier, secure, and does not require identity.

Bitcoin doesn't require identity, but it's not very private because there is a public ledger, and you can be subject to chain analysis.

But centralized products can offer privacy, and many people trust them to keep their privacy, like VPN providers, mixers, and so on.

The only thing these centralized entities cannot do is keep things from governments with valid subpoenas, which is not the kind of "privacy" most people need.

• Today, most holders of Bitcoin do so in a centralized way, e.g. with a broker or an app.

Because many Bitcoin holders don't realize that when they store their assets on an exchange, they lose access to control over it. It does seem to make things easier for users, because they can trade and use their crypto assets directly from the application, but without them realizing it, the numbers in the application are only a representation of the assets owned by the user, while the real assets are in the exchange wallet. And because of this, users lose their access to fully control their assets and whenever the exchange wants they can use these assets without the user knowing.
[/list]

Correct. Most users use Bitcoin this way. You know why? Because they don't need to evade the government and they don't even want to try.

Bitcoin's goal was to solve a problem that only a few thousand people in the world actually have. Then millions of people started using it to solve a different problem, which was a meme investment instrument. Now almost all of Bitcoin's users don't care about "decentralization" one way or another--they just want the price of Bitcoin to go up.

I am hypothesizing here that some day, this is going to catch up with the core devs of Bitcoin, and they may well change the network to be a better product for their average user.

[Sonia_123]

No problem,we will still be with bitcoin and continue the way they want it to be ,but i don't think it will deviate from its original purpose because bitcoin has saved a lot of countries and individuals from financial bondage which their traditional banks or financial institution always have made them go through.

[Ale88]

I don't think that it can be done, it's working on a PoW system, I'm sure that in a centralized network, that's not how you would run things. Making bitcoin centralized means you got to own all of the mining networks or control all of them because the miners serves as a way to validate transactions and they're all moving independently from each other. It's also a big change if we did push for centralization because that's the total opposite of bitcoin and it's core tenets, centralization also means that bitcoin is susceptible to the manipulation of powerful few and that's not something I'd want to see for myself happening.

Besides the mining, if bitcoin would somehow become completely centralized I would say that it would slowly die. Being completely decentralized is the main factor that makes bitcoin different from all the other altcoins (and shitcoins) out there. That is the reason people believed in bitcoin. If you remove that you're pretty much killing its purpose.

[Learn Bitcoin]

Please stop daydreaming. Please do not imagine something that is not going to happen anytime soon. Now if you want to say that Bitcoin is already getting centralized in some way, then yes. I agree with that. Bitcoin is getting centralized daily, and ETF approvals were the biggest step towards making it centralized. Even though ETF is good for investors, it does not fit with Bitcoin's principle.

Even though centralized exchanges and ETFs make it more centralized, the main core of Bitcoin and its chain is decentralized. As long as people care about privacy and most devs support privacy, we will have what we have right now.

[legiteum]

Besides the mining, if bitcoin would somehow become completely centralized I would say that it would slowly die. Being completely decentralized is the main factor that makes bitcoin different from all the other altcoins (and shitcoins) out there. That is the reason people believed in bitcoin. If you remove that you're pretty much killing its purpose.

Almost nobody uses Bitcoin in a decentralized way. The evidence from the market is that almost nobody actually cares about that.

The thing that makes Bitcoin have a higher price than other cryptocurrencies like Ether or Monera is the name, "Bitcoin". It's the same reason a t-shirt with "Fruit of the Loom" written on it cost $3.99 at Walmart and the same exact set of molecules goes for $350.00 if it has the name, "Gucci" on it.

As long as people care about privacy and most devs support privacy, we will have what we have right now.

As I've said before in The Anon Paradox, there are two kinds of "privacy" people want: privacy from civilians (including companies and criminals) and privacy from governments. Most people want and need the former, but only a tiny few people need to keep something so secret that even a direct government subpoena cannot discover it. Most people aren't interested in going against their own government.

Don't get me wrong, I started this thread as a thought experiment, but the arguments in favor are stronger than I thought they would be...

[MorganaX]

What if they centralized Bitcoin?

Nothing will happen to bitcoin because bitcoin will never become centralized, I have never thought of this and believe this will never happen. Don't waste time making assumptions and scenarios that will never happen. Instead, focus on doing your job well, spending your time earning money to accumulate as many bitcoins as possible. Because as the price of bitcoin increases, everyone will enjoy the profits they make, while you continue to needlessly doubt the future of bitcoin.

Well this is just a normal thing to do and that's why no matter the assurance that Bitcoin gives people still have doubts about it but Bitcoin has really been something else and that's why I trust and believe it and moreover it's because of the way Bitcoin is decentralized that gives it all the attention in the crypto market more than the other coins. Bitcoin is something that no one control and that has been it's core value ever since so am very certain that it will keep on with that first impression by Satoshi Nakamoto.

[Minor Miner]

Maybe the government should hunt down Nakamoto and force him to change some codes in the Bitcoin Network if possible, neutralizing the decentralized part and making it centralized, or the government should take over the whole mining hashrate and start attacking Bitcoin Network? I am just trying to give you what they could do. Unfortunately for them, it is impossible.

Even the government found Satoshi, I don't think he can change anything to make bitcoin centralized. He created bitcoin, it is open source and to change it requires consensus from the bitcoin community,  no one can arbitrarily change bitcoin, not even its creator.

The government could take over the mining hashrate but this would cost a lot of money, time and this would not be commensurate with what they would get in return. So this possibility will not happen either.

[BALIK]

What if they centralized Bitcoin?

Nothing will happen to bitcoin because bitcoin will never become centralized, I have never thought of this and believe this will never happen. Don't waste time making assumptions and scenarios that will never happen. Instead, focus on doing your job well, spending your time earning money to accumulate as many bitcoins as possible. Because as the price of bitcoin increases, everyone will enjoy the profits they make, while you continue to needlessly doubt the future of bitcoin.

But if all you care about is the price of Bitcoin going up, and centralizing it could vastly increase it's accessibility, and therefore greatly increase it's price, then why would you be against it?

And if there are billions of dollars to be made in Bitcoin if the price goes up, why would you assume this could never happen?

I'm not saying anything against or agreeing here, I'm just saying don't waste time thinking about things that will never happen. Bitcoin has become very popular and received great support from the community because it is decentralized, its decentralized nature makes it different and people love it for that. Do you think it would still be worth it if it became centralized? If it becomes centralized then it will no longer have community support, so how can it increase in price?

[Z-tight]

If Bitcoin's core devs wanted to centralized Bitcoin, they could centralized Bitcoin. There's nothing stopping them.

You are missing the point here. BTC devs can do whatever they like, they can make a change and write a new code, but that does not mean everyone in the community is going to accept the change, and that is why BTC is decentralized and censorship resistant.

The community still has to agree to this new change and run the code in their own device. It can result in a hard fork and the community will decide which of the protocol they want to install and follow, just like what happened with the creation Bitcoin SV. So nobody can centralize BTC or arbitrarily change the code for everyone, the network does not have a single point of failure.

[ABCbits]

Imagine that one day, the core devs of Bitcoin would come to a consensus that:

--snip--

Could this happen? If not, why not?

No. While Bitcoin Core developer have big continuance, don't forget there are other Bitcoin full node software. Bitcoin mining industry also have become very big, so they'll make sure people know attempt to centralize Bitcoin (which remove miner).

Maybe the government should hunt down Nakamoto and force him to change some codes in the Bitcoin Network if possible, neutralizing the decentralized part and making it centralized, or the government should take over the whole mining hashrate and start attacking Bitcoin Network? I am just trying to give you what they could do. Unfortunately for them, it is impossible.

The community will just ignore code change proposed by Satoshi. And i don't expect government would spend money to buy mining hardware or rent hashrate when they have other more important stuff to do.

[legiteum]

Do you think it would still be worth it if it became centralized? If it becomes centralized then it will no longer have community support, so how can it increase in price?

Why would it no longer have community support?

And making Bitcoin viable to be used as a mainstream payment mechanism would introduce the product to hundreds of millions more people on a daily basis. That would arguably increase the price.

No. While Bitcoin Core developer have big continuance, don't forget there are other Bitcoin full node software. Bitcoin mining industry also have become very big, so they'll make sure people know attempt to centralize Bitcoin (which remove miner).

Thank you. This is the best answer here so far, and the one that actually has a basis in business/politics rather than mythology and religion.

So in summary, Bitcoin's fate is determined by the miners, who make their money from mining, and they would never cut off their own business no matter what.