Has Bitcoin Finally Lost Its Decentralization?

[mrquackquack]

Thats a question we all would like to know. Has Bitcoin been finally sold out to big businesses, corporations, investment groups and even countries?? In the last few years these things have resonated louder than ever. Investment groups buying thousands and even millions worth of Bitcoin at a time, countries even making the once comical like currency its very own currency for everyday life. So the question once again is asked... Has Bitcoin Finally Lost It's Decentralization? Let us know of your thoughts and comments on this and thanks again.

[Charles-Tim]

Bitcoin network is not centralized. This is what we should related to centralization. Since many years ago were centralized exchanges and custodial wallets which are all centralized but the purpose of bitcoin to be used for P2P on noncustodial wallet has not changed. Also no organization is controlling bitcoin.

[Nwada001]

How do big companies and investors buying and holding large amounts of bitcoin move Bitcoin from being decentralised to centralized? The amount of Bitcoin that those said organisations buy and hold is the only set of Bitcoin they have total control over.
 
The Bitcoin blockchain itself is decentralised, and it has not changed from that yet. Being decentralised means there is no central control over the network, like the developer of most alt coins can control and freeze your asset because it's in your wallet. 
 
The only time I can argue and believe that Bitcoin has been centralised is if censorship is introduced and implemented, which actually is against the purpose of Bitcoin.

[Zlantann]

Thats a question we all would like to know. Has Bitcoin been finally sold out to big businesses, corporations, investment groups and even countries?? In the last few years these things have resonated louder than ever. Investment groups buying thousands and even millions worth of Bitcoin at a time, countries even making the once comical like currency its very own currency for everyday life. So the question once again is asked... Has Bitcoin Finally Lost It's Decentralization? Let us know of your thoughts and comments on this and thanks again.

Bitcoin is still decentralised because no single entity can claim to control it. But I cannot deny that the massive investment of some institutional investors such as the ETF providers would not influence the sector in the future. These firms are massively acquiring Bitcoin and might be able to influence the price movement with their inflow or outflows. But Bitcoin will always decentralised because there is a silent majority that is using Bitcoin without these centralised intermediaries. Like  Nwada001 rightly said, the system will become centralised only if the government make policies that will promote censorship which might result in the blacklisting of wallets or addresses.     

[pooya87]

You may be confusing bitcoin with fundamentally flawed altcoins such as ethereum.

This is one of the reasons why the Proof of Stake (PoS) protocol is fundamentally flawed. If someone controls a large number of coins of a PoS coin they gain a lot of power in that chain. Good news is that Bitcoin is using Proof of Work (PoW) algorithm not the flawed PoS that some shitcoins use. Which means it doesn't matter how much coins any entity has, it gives them no power over Bitcoin. The only thing they can do with large amounts of bitcoin is to influence the market and that's pretty much it.

[SquirrelJulietGarden]

Thats a question we all would like to know. Has Bitcoin been finally sold out to big businesses, corporations, investment groups and even countries??

The Pareto principle says 80% of bitcoin would belong to 20% Bitcoin owners. This principle works for many areas and cases, I believe it continues to work rightly for Bitcoin distribution too especially if we only count unlost bitcoins.

https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
https://www.bitcoinmagazinepro.com/charts/hodl-waves/

If you use the second chart for HODL waves, and account for possible unlost bitcoins, you will see Pareto principle works.

Has Bitcoin Finally Lost It's Decentralization?

No. Its decentralization still exists, with network hash rate distribution and with Bitcoin full node distribution.

https://buybitcoinworldwide.com/mining/by-country/
https://bitnodes.io/

[retreat]

Bitcoin remains decentralized now or forever, period. There is no question that Bitcoin is still decentralized or not just because more people or companies are interested in it. In fact, we can say that the distribution of Bitcoin is still at a level that is not alarming, even when there are several companies or individuals who hold hundreds of thousands of Bitcoins in their wallets. People who want to invest in Bitcoin can still buy it even for as little as a few dollars - and they can freely buy or sell Bitcoin without anyone being able to intervene with their transactions.

[adrov]

Thats a question we all would like to know. Has Bitcoin been finally sold out to big businesses, corporations, investment groups and even countries??

The Pareto principle says 80% of bitcoin would belong to 20% Bitcoin owners. This principle works for many areas and cases, I believe it continues to work rightly for Bitcoin distribution too especially if we only count unlost bitcoins.

https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
https://www.bitcoinmagazinepro.com/charts/hodl-waves/

If you use the second chart for HODL waves, and account for possible unlost bitcoins, you will see Pareto principle works.

Has Bitcoin Finally Lost It's Decentralization?

No. Its decentralization still exists, with network hash rate distribution and with Bitcoin full node distribution.

https://buybitcoinworldwide.com/mining/by-country/
https://bitnodes.io/

Let's say hypothetically that CIA is actually the creator of BTC (as per conspiracy theories), how decentralized is it if they sell their 1M+ stack to like already big holder BlackRock/Microstrategy? :/

What happens then? Is that enough of a "market share" to make things scary in freedom/decentralization aspect?

[Fundamentals Of]

Indeed coins are sold to individual persons, big businesses, corporations, investment groups, countries, etc but coins are not votes as to Bitcoin consensus. The Bitcoin network does not operate in such a way that those who have more Bitcoin will have more say in its operation. Bitcoin's decentralization does not work that way. Even if you own half of all the circulating supply of Bitcoin, it does not mean you can decide as to what path Bitcoin will take next. The distribution of the coins is not what determines how decentralized the network is.

[fuguebtc]

Remember one thing, it is the decentralized nature that makes bitcoin valuable today, so if it loses its decentralized nature and becomes completely centralized, I believe it will become worthless. The decentralized nature is what makes bitcoin different from other currencies and the rest of the crypto industry, if this is lost then who needs bitcoin anymore? Meanwhile, many altcoins are easily scalable, have cheap transaction fees, fast confirmation times... altcoins are almost completely superior to bitcoin, but their fatal disadvantage is centralization. So they can never compare or surpass bitcoin.

[Kelward]

Bitcoin network is not centralized. This is what we should related to centralization. Since many years ago were centralized exchanges and custodial wallets which are all centralized but the purpose of bitcoin to be used for P2P on noncustodial wallet has not changed. Also no organization is controlling bitcoin.

The simple and direct answer to the OP question is NO, Bitcoin has not lost it's decentralization. Institutions and governments only have control over the amount of Bitcoin that they hold, just like any other hodler will have the control of the amount of the Bitcoin that they hodl. The Bitcoin blochchain is not centralized therefore not in the control of any single entity. Bitcoin is a unique decentralized digital cash that gives it's holders freedom and privacy from any third party including governments and institutions if held in a none custodial wallet.

[thecodebear]

OP, not sure why you would think it has lost decentralization. Nothing has changed. It's decentralized as it has always been. Seems like you don't understand what decentralization means. Anyone can own Bitcoin, that doesn't change its decentralization.

[tbct_mt2]

The simple and direct answer to the OP question is NO, Bitcoin has not lost it's decentralization. Institutions and governments only have control over the amount of Bitcoin that they hold, just like any other hodler will have the control of the amount of the Bitcoin that they hodl. The Bitcoin blochchain is not centralized therefore not in the control of any single entity. Bitcoin is a unique decentralized digital cash that gives it's holders freedom and privacy from any third party including governments and institutions if held in a none custodial wallet.

Bitcoin is a best cryptocurrency in decentralization and if Bitcoin lost its decentralization, it will be the last cryptocurrency fails to maintain decentralization of its network. Other cryptocurrencies (altcoins) would lose their decentralization at their blockchain launches by bad designs or with time like Ethereum became more centralized after its upgrades and switching from Proof of Work to Proof of Stake.

If Bitcoin has a day to lose its decentralization, we will no longer have any decentralized cryptocurrency. This means cryptocurrency community has something to defend together.

[goldkingcoiner]

Thats a question we all would like to know. Has Bitcoin been finally sold out to big businesses, corporations, investment groups and even countries?? In the last few years these things have resonated louder than ever. Investment groups buying thousands and even millions worth of Bitcoin at a time, countries even making the once comical like currency its very own currency for everyday life. So the question once again is asked... Has Bitcoin Finally Lost It's Decentralization? Let us know of your thoughts and comments on this and thanks again.

No, Bitcoin is still decentralized. It is an internal property of Bitcoin. The only thing big groups can do is manipulate the price by buying/selling. Sure they can buy off the devs but once those devs go against the Bitcoin community, they will no longer be accepted as devs. In fact, anyone can be a dev. All you have to do is make a contribution to Bitcoin code which the larger part of the community agrees with.

[TheUltraElite]

The more big companies, corporates buy bitcoin the more its popularity rises. But does that change the fact that bitcoin is not being controlled by a central figure? No - hence it does not "dilute" its decentralization

Gaining spread is not the same as centralization here.

I am very happy to see it spread, the more it does the more scarce it becomes to common people and the price rises. Hence it becomes a good coin to store value in and trade in the long term.

[o48o]

You may be confusing bitcoin with fundamentally flawed altcoins such as ethereum.

This is one of the reasons why the Proof of Stake (PoS) protocol is fundamentally flawed. If someone controls a large number of coins of a PoS coin they gain a lot of power in that chain. Good news is that Bitcoin is using Proof of Work (PoW) algorithm not the flawed PoS that some shitcoins use. Which means it doesn't matter how much coins any entity has, it gives them no power over Bitcoin. The only thing they can do with large amounts of bitcoin is to influence the market and that's pretty much it.

Can you elaborate what you mean by this, as i find this to be a weird argument. Imho it's echoes of the fud from the time pos plans were announced for eth and people who had invested on their mining equipment for eth were in danger of losing their living, so they freaked out. And we can see that majority of the people wanted to use new eth, so even that decision doesn't seem to be centralized. Owning 51% of eth won't allow you to do as drastic measures as owning 51% of the hashpower. And in both cases, attackers would just be shooting on their own foot.

And same centralization argument could be used for bitcoin as well, as in bitcoin you can just replace those whale coin holders with giant mining farms that hold majority of the hashpower.

[fiulpro]

Is there any true Decentralisation?  

As long as people are financially built different they have less/more assets pertaining to their finances and current situation, which means if a person holds a huge sum, undoubtedly he can sway the market and I have come to believe that people who are rich can contact each other and make profits together by dumping and pumping the market.

I do not believe that there is true decentralisation its a notion and bitcoins is still faring better than other currencies in this state but as long as people hold different amounts their market ratio is going to be different and that’s where the whales come in.

I believe bitcoin was never truly decentralised and its as decentralised as it was supposed to be, we cannot truly change this can we ?

OP, not sure why you would think it has lost decentralization. Nothing has changed. It's decentralized as it has always been. Seems like you don't understand what decentralization means. Anyone can own Bitcoin, that doesn't change its decentralization.

Yes but I believe he is trying to hint towards the fact that whales can sway the market and its not as free as a true decentralised currency should be)

[MeGold666]

How do big companies and investors buying and holding large amounts of bitcoin move Bitcoin from being decentralised to centralized?

I think OP is suggesting that due to the fixed amount of coins that will ever exist (in current version of protocol) and the fact that with time some bitcoins gets lost forever and the number of actual coins that are available for the public is shrinking - this companies will own substantial amount of BTC to control the market in terms of price and will be able to decide who gets to use it so there is a kind of centralization and the system becomes permission-able instead of permission-less.

The only time I can argue and believe that Bitcoin has been centralised is if censorship is introduced and implemented, which actually is against the purpose of Bitcoin.

In this scenario where few centralized entities own majority of coins, censorship could be imposed.

[Solosanz]

Bitcoin will never lose it's decentralization in network, but Bitcoin would be centralized if all coins were owned by big institutions/people. What's the point to own the network when you didn't own the coins? they can do anything they like, while the miners and people can only hoping they will sell the coins to us. They might sell their coins, but in ridiculous price.

That's why if you don't want such kind situation happen in the future, make sure to not buy ETF and avoid to use centralized sites to hold your coins.

[Hewlet]

OP, not sure why you would think it has lost decentralization. Nothing has changed. It's decentralized as it has always been. Seems like you don't understand what decentralization means. Anyone can own Bitcoin, that doesn't change its decentralization.

it's obvious he doesn't understand the meaning of Bitcoin being decentralized. If the numbers of holders that currently owns Bitcoin and how much Bitcoin they hold in total can determine if Bitcoin will suddenly change from being decentralized to become centralized, government would have team up together to buy majority of Bitcoin so they can have full control of it. That people are still getting involved in Bitcoin is mainly because it's still decentralized. if for any reason Bitcoin gets control by a selected few, most prospective adoptors would shy away from investing in Bitcoin and will be forced to politicize it. If more Bitcoin whales continue buying Bitcoin, the only concern is going to be that anyday they choose to sell off all thier Bitcoin, it's going to affect Bitcoin price for the moment but because we have different holders of Bitcoin ranging from individual, institutions and even exchange, it's going to be almost impossible for such thing to ever happen.