If Bitcoin was centralized, would the price of BTC go down or up?

[legiteum]

Humans are corruptable, and they would find some justification to violate the cap. 

Yes, human institutions have a track record of bending rules, especially in finance, but it is not inevitable in every system and makes Bitcoin different is that its 21 million cap is not just a promise but it is enforced by code and a decentralized network of participants. If Bitcoin were centralized, then sure, the temptation to change the cap would exist but then, it would not be as simple as humans will definitely break it. It would depend on governance structures, and how much users trust or distrust whoever is in control.

Changing the 21 million cap could be done anytime the Bitcoin core development team wants to do it--just like they could change the PoW architecture and move to trusted nodes in order to make transactions faster and cheaper.

Indeed, changing the 21 million cap is... ONE LINE OF CODE whereas moving to a more centralized architecture would be a big change.

At the end of the day, if the US government wanted the cap changed (why would they? why would anybody?) then they could effectively order it done and threaten a crackdown that would send the price of BTC down 99%, which nobody would want.

Sorry, but the world is ruled by nuclear weapons, not code .

[leonair]

If Bitcoin had come to the market with a centralized concept, then Bitcoin would never have reached the position it has. Because there are various types of centralized finance management systems in the world where they could not create much value and could not create their own position in the market. However, since Bitcoin is decentralized, it has gradually created confidence among people that Bitcoin is much stronger than all the other finance management systems in the world and if there is money here, it is completely under their control. So there is no problem of losing money or long processing during emergencies, which is why Bitcoin has become so popular. If it had been centralized, I myself would not have been interested in Bitcoin.

[BlackHatCoiner]

At the end of the day, if the US government wanted the cap changed (why would they? why would anybody?) then they could effectively order it done and threaten a crackdown that would send the price of BTC down 99%, which nobody would want.

Congratulations. You just answered yourself that the supply cap cannot change for only as long as Bitcoin is decentralized. If it were centralized, a person could force the change across all users. Since it is decentralized, and no one can force someone else to either adopt the new version or abandon it, violating the supply cap would need to pass a market test that is fundamentally impossible to do.

You're discovering one piece at a time. Eventually you'll be a Bitcoiner.

[ertil]

Indeed, changing the 21 million cap is... ONE LINE OF CODE whereas moving to a more centralized architecture would be a big change.

In 2017, people also thought, that increasing the maximum size of the block is also just "one line of code". And you can see, where BCH is now. Or you can see, where eCash is, which introduced mandatory dev fees in the coinbase transaction. This change was also simple, and now, one XEC is worth even less than a single satoshi.

Of course, developers can release any version they want. But if they introduce some backward-incompatible change, then all old nodes will reject it. Backward compatibility is important: if you release a new version, which would simply ignore it, then you will end up on your own coin, while thousands of existing nodes will still use the old version.

[fillippone]

If bitcoin were centralised his value would have been greatly inferior.
Just remember what happened with Ethereum and the DAO hack.
The centralisation of the shitcoin allowed for the " can you guys stop trading "moment.
With bitcoin, this is not possible, so nobody will be able to censor your transaction.

[rodskee]

1. Made it so that Bitcoin could truly handle, natively, every single daily transaction on the planet for essentially zero transaction cost and millisecond-level clearing time, making it so that Bitcoin could truly replace all financial transactions, even the tiniest ones, and it would do it at a lower cost and higher speed than credit cards.

2. Mostly killed the idea of "decentralization" for Bitcoin because the new architecture would be controlled by a single entity or a small cooperative of closely coordinated entities that would maintain nodes tightly together, killed PoW, etc. etc.

first of all that’s not happening

if btc becomes more centralized and an entity takes over its authority then surely they will try to get as much profits not only to sustain their efficient operations but also for more money

[kawetsriyanto]

There may be several differing views:

Loose hope in Bitcoin
Because it's centralized, BTC can easily be managed, controlled, and directed to whatever the central government desires. This is detrimental to us, as it could change according to their wishes. This could be even more dangerous than high volatility.

Stay in Bitcoin
The reason is, they can become old stock players who have often invested in shares of companies or other institutions, so they are used to playing with centralized assets and optimizing opportunities to gain profits. However, I don't know how long this will last.

Ignore
There may be people who are good at ignoring situations like this and just keep their views on Bitcoin as they are.

[legiteum]

At the end of the day, if the US government wanted the cap changed (why would they? why would anybody?) then they could effectively order it done and threaten a crackdown that would send the price of BTC down 99%, which nobody would want.

Congratulations. You just answered yourself that the supply cap cannot change for only as long as Bitcoin is decentralized. [...]

Huh? What are you talking about? The Bitcoin core team could make a the change to the one line of code required increase (or decrease) the 21M coin limit tomorrow. "Centralization" has nothing to do with it.

The OP did not imply that control of the Bitcoin codebase would be changed at all, only that PoW would be replaced with a trusted server scheme. This is just an architecture change, not a governance change.

Whether the architecture change would be accepted would be up to the major players like the ETFs, the big apps, the major wallets, and the major holders of BTC. Again, none of this has to do with Bitcoin's PoW architecture.

Indeed, changing the 21 million cap is... ONE LINE OF CODE whereas moving to a more centralized architecture would be a big change.

Of course, developers can release any version they want. But if they introduce some backward-incompatible change, then all old nodes will reject it. Backward compatibility is important: if you release a new version, which would simply ignore it, then you will end up on your own coin, while thousands of existing nodes will still use the old version.

Correct. If the change is not accepted by the major players (and posters here, as awesome as we think we are, are NOT major players ), then the change would be ignored--and there would be a crisis in trying to discover a new team to shepherd the Bitcoin core codebase).

1. Made it so that Bitcoin could truly handle, natively, every single daily transaction on the planet for essentially zero transaction cost and millisecond-level clearing time, making it so that Bitcoin could truly replace all financial transactions, even the tiniest ones, and it would do it at a lower cost and higher speed than credit cards.

2. Mostly killed the idea of "decentralization" for Bitcoin because the new architecture would be controlled by a single entity or a small cooperative of closely coordinated entities that would maintain nodes tightly together, killed PoW, etc. etc.

if btc becomes more centralized and an entity takes over its authority then surely they will try to get as much profits not only to sustain their efficient operations but also for more money

Why doesn't the current Bitcoin core team try to maximize their profits? Why doesn't the entity that controls DNS for the entire internet become Amazon? Lots of things have a central authority yet are not corrupted by commercial interests. (And if you don't trust that idea at all you'd better get off the Internet because that's the way it's governed!).

There may be several differing views:

Loose hope in Bitcoin
Because it's centralized, BTC can easily be managed, controlled, and directed to whatever the central government desires. This is detrimental to us, as it could change according to their wishes. This could be even more dangerous than high volatility.

Stay in Bitcoin
The reason is, they can become old stock players who have often invested in shares of companies or other institutions, so they are used to playing with centralized assets and optimizing opportunities to gain profits. However, I don't know how long this will last.

Ignore
There may be people who are good at ignoring situations like this and just keep their views on Bitcoin as they are.

I suspect 99% of BTC holders are in the third category. They just want their bags to get bigger, they don't care about computer architecture. If Bitcoin's architecture can be changed to make it more broadly used (say for every single daily transaction done by humans), then all they would know is that they'd be richer that day.

[AmoreJaz]

If bitcoin were centralised his value would have been greatly inferior.
Just remember what happened with Ethereum and the DAO hack.
The centralisation of the shitcoin allowed for the " can you guys stop trading "moment.
With bitcoin, this is not possible, so nobody will be able to censor your transaction.

If indeed theoretically speaking, bitcoin is centralized. I would say, this currency has long been eating the dust already. Because if the owner will have a total control or can manipulate its market, for sure, this currency won't be patronized by the people just like how they are patronizing it now. As they are seeing that no one can totally control its trading market, they continue to utilize and adopt this currency. Just look at those thousands of alts with their own developers and owners, it is like about 90% of them are not doing great in the trading market. Most will only attract at the beginning of their trading life, but it will slowly decline up until they can't recover anymore. And so, traders will just move on to the next one.

[Abiky]

So here's a thought experiment for you all.

Imagine that the Bitcoin core codebase was changed to an architecture that accomplished two things:

1. Made it so that Bitcoin could truly handle, natively, every single daily transaction on the planet for essentially zero transaction cost and millisecond-level clearing time, making it so that Bitcoin could truly replace all financial transactions, even the tiniest ones, and it would do it at a lower cost and higher speed than credit cards.

2. Mostly killed the idea of "decentralization" for Bitcoin because the new architecture would be controlled by a single entity or a small cooperative of closely coordinated entities that would maintain nodes tightly together, killed PoW, etc. etc.

The question is, upon hearing this news, how would the Bitcoin market react?

Here's some of my guesses:

Negative reaction: "OMFG they are ruining the original idea behind Bitcoin! I'm selling all of my sats!".

Positive reaction: "Wow, BTC is going to absolutely MOON since adoption will go crazy now that we can use Bitcoin everywhere, I'm buying every sat I can to get on this rocket ship!"

...

I think prices will keep going up. I mean, nobody cares about decentralization these days. Everybody just wants to make money. The crypto market is already centralized. And with "Wall Street" in the game, things are only worse.

So if Bitcoin becomes centralized someday, the effect on market prices would be negligible. Unless, there's a sizeable amount of Bitcoiners who're fond of decentralization and decide to "dump" their coins all of a sudden. The odds for this happening are very slim. But that's just my opinion. No one knows what will happen in the future. Better diversify your investment to be prepared for the worst.

[X-ray]

If bitcoin is centralized I doubt it will be as big as it is today, companies got no shortage of money to make their system fast but they can't make decentralization because it's going against their very idea of being a company.

Ethereum and others aren't getting big because they shifted to a more centralized system, they got big because their smart contract is pretty good but it's starting to show cracks.

A centralized coin also carries its risk of counterparty risk. You are going to need to trust the centralized validator that controls it all. Do you think ETF issuer will issue ETF for that kind of coin if the super validators are crooks? that's one less adoption for you.

[Iranus]

If Bitcoin had come to the market with a centralized concept, then Bitcoin would never have reached the position it has. Because there are various types of centralized finance management systems in the world where they could not create much value and could not create their own position in the market. However, since Bitcoin is decentralized, it has gradually created confidence among people that Bitcoin is much stronger than all the other finance management systems in the world and if there is money here, it is completely under their control. So there is no problem of losing money or long processing during emergencies, which is why Bitcoin has become so popular. If it had been centralized, I myself would not have been interested in Bitcoin.

I agree with you that if Bitcoin were centralized, it would never have reached the position it is in today. However, I am quite skeptical of those who claim they would not care about bitcoin if it were centralized.

The reality is that most of us are attracted to bitcoin because of its volatility and profit potential, not because of its decentralized nature. Very few people actually join because of the ideology of financial freedom or resistance to the centralized system.

In my opinion, if Bitcoin could still go up in price and bring huge profit, many people would still be interested in Bitcoin. Regardless of whether it is centralized or decentralized.

[BlackHatCoiner]

Huh? What are you talking about? The Bitcoin core team could make a the change to the one line of code required increase (or decrease) the 21M coin limit tomorrow. "Centralization" has nothing to do with it.

It does. If it were centralized, you would either have to accept the change, or abandon Bitcoin. Since it is decentralized, you can simply refuse to accept the change, just as millions of other people, and belong to a network with economic majority and rules unchanged.

Miners, merchants, developers, millions of users, exchanges and institutional investors are invested in the concept of 21 million. If a developer changes the cap, then he must either convince all those people to accept his insane proposal, or he's just getting ignored into irrelevance. If you think it's as easy as changing a constant in the code, you're just beyond help.

[Nwada001]

BTC might go up at 1st because people would be excited about faster and cheaper transactions. but in the long run, i think it would go down. BTC is valuable because it is decentralized. if one company controlled it, it would become just another payment system

Anything that makes Bitcoin lose its decentralized nature, let's say there was a pressure push among developers for censorship to be possible and major node operators agree with it, you will see people losing hope in Bitcoin. Many will still be with it, but the value will drastically drop because one thing that has been keeping people there is no longer there; it's only going to be just like altcoins, which you hold with fear of not knowing when the developer will decide to lock your coin or decide to do what will dump the value to an unimaginable low.

[Peanutswar]

When it become centralized still there is a potential with the bitcoin, but now depends on the investor because probably it has an impact where its become created. How does it function now if most of the use of the bitcoin are the same and just being centralized possible there is a manipulation now most of the countries right there they dont want to get dominated with other country possible they will against and not totally support bitcoin because of possible threat to them if they will support this project or token now another aspect if there is still a demand people can see potential yes because of easy to transact. Still, now this need a KYC to use bitcoin or even wallets to transact and of course fees can be manipulated at the same time. Details can now be vulgar and provide no privacy at all.

[legiteum]

A centralized coin also carries its risk of counterparty risk. You are going to need to trust the centralized validator that controls it all. Do you think ETF issuer will issue ETF for that kind of coin if the super validators are crooks? that's one less adoption for you.

OK, OK, STOP.

I see that I really should have started the OP here with my definition of "centralized". I do not mean that Bitcoin would just be owned by one company--that is not necessary.

Bitcoin's codebase governance today is centralized:  there is a Bitcoin core team who operate by consensus and are responsive to the community.

Repeat: in the way I am thinking about it, Bitcoin is already centralized and always has been. The only difference I am proposing is a change to the Bitcoin codebase that would drop PoW and increase node requirements to be trusted for both security and latency, which would reduce the number of entities serving the Bitcoin network (although the network has already consolidated quite a bit in this regard).

I am not talking about "Bitcoin being owned by one company". There's no reason for that. Hence there is no "counterparty risk" or risk of Bitcoin being taken over by one company.

Today, Internet systems like DNS are run in this way--and that runs the WHOLE INTERNET including Bitcoin. If you hate this because of your religion, then you hate the whole Internet and thus it's illogical to like Bitcoin since Bitcoin depends on the Internet.

[knuckey]

"I'm sure there will be pros and cons to Bitcoin itself. Some people who don't care about Bitcoin's uniqueness but care about the returns it offers will certainly support this centralized system. They will usually fully support it because Bitcoin will skyrocket if it is approved. However, some who oppose it will oppose this statement, arguing that ""Bitcoin's characteristics will be lost."" This is certain because some people also like Bitcoin for its uniqueness. If it is removed, there's a chance they will leave."

[uchegod-21]

Other competing products like SOL, ETH, XRP, and so on have moved to less-decentralized architectures and they are bigger than ever. You could make the case that Bitcoin will become "the MySpace of digital currency" if it doesn't evolve to the new realities of the market. On the flip side, you could also argue that Bitcoin could wipe all of these competitors out in a one day just by changing the technical architecture.

My own guess is that Bitcoin would MOON if they announced this, but that's just my guess. I would love to hear what others think of this.

It is never a coincidence that these altcoins mentioned above are still yet to replace or match up with Bitcoin in terms of it being the number one cryptocurrency in the world. It is not just due to the first-mover advantage, but also the one thing that has made Bitcoin more unique compared to the rest, and that is "decentralization." Decentralization among others is Bitcoin's originality. Removing that originality and putting it in the hands of a single entity or a group of specific entities will make Bitcoin become vulnerable to manipulation, regulation, and control and many investors, especially long-term investors, may be forced to sell off, as it will be considered that trust and security may be lost.

In my opinion, I think that if Bitcoin is officially centralized, there will be a lot of temporary panic in the short term, and many long-term investors may exit the market for fear of regulatory invasion. Then, maybe in the long term, when people may have adjusted to the new system, we can begin to make fresh speculations because the investors might not come back thesame again.

[legiteum]

It is never a coincidence that these altcoins mentioned above are still yet to replace or match up with Bitcoin in terms of it being the number one cryptocurrency in the world. It is not just due to the first-mover advantage, but also the one thing that has made Bitcoin more unique compared to the rest, and that is "decentralization." Decentralization among others is Bitcoin's originality. Removing that originality and putting it in the hands of a single entity or a group of specific entities will make Bitcoin become vulnerable to manipulation, regulation,

No, it wouldn't. Is DNS subject to manipulation by the committee that oversees it? I don't think so.

And regulation? Bitcoin is regulated already. There are tons of regulations about how BTC can be bought and sold all over the place. Changing the technical architecture won't change anything with regard to regulations.

In my opinion, I think that if Bitcoin is officially centralized, there will be a lot of temporary panic in the short term, and many long-term investors may exit the market for fear of regulatory invasion. Then, maybe in the long term, when people may have adjusted to the new system, we can begin to make fresh speculations because the investors might not come back thesame again.

I agree it might spook a few smaller investors at first, but let's be realistic here: this kind of change of Bitcoin's architecture would not occur unless major holders like Saylor and the major apps and brokers were on board.

The prospect of Bitcoin being able to handle every single daily transaction in the whole world would be very appealing. Only this way could Bitcoin become a true alternative to today's major transactions, as opposed to just being a meme speculation instrument, which is very limiting.

[Tetu100]

For the fact that bitcoin is decentralized is what has automatically made it what it is today. Centralizing it is like making it more of a fiat money and that makes no sense to me. However, having such thought in mind or ever thinking of centralizining bitcoin is like taking it away from it original purpose as a store of value to some kind of shit coin that can be easily manipulated at any point in time.

Furthermore, bitcoin didn't just wakeup to start serving as an hedge to inflation, it's because of the fact that it's being decentralized in nature (can not be control by any governmental body), perhaps that's to tell how important the features of decentralization means, so thinking of taking it away is a completely a red flag if you ask me.