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

[davis196]

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?

If you remove all the core components of Bitcoin just to make it centralized this won't be Bitcoin anymore. This would be a centralized payment system with the name "Bitcoin" on top of it. Centralized payment systems have their own flaws. If such centralized system crashes a few times, the trust of the people would decrease a lot and if the central entity, that runs the system start blocking and reversing transactions, the trust would completely disappear and the the people would start dumping their coins in no time. We already have a centralized coin like Ripple. Bitcoin would most likely look exactly like Ripple, if it becomes centralized. Do you like Ripple?

[elda34b]

I don't think it will be that simple either way. One thing for sure is that I'll probably won't hold onto my BTC for long. If the use case is basically an alternative to ETH or something else, I don't think it will be suitable to continue using a network that's controlled by a third-party. Might as well continue using fiat or digital stable coins if that was the case. I'll probably pivot to gold or something else. I wonder who would continue buying BTC. Whales definitely won't let it die, but whose money they'll take to make sure they don't get burned then?

[satscraper]

~

The initial idea of Satoshi ^{that Bitcoin could be mined virtually by every household CPU} has failed.

Now the majority of Bitcoin is mined by the small number of large companies that you can count on your fingers.

In this respect, Bitcoin is centralized today.

The correct question should sound like this: If Bitcoin was decentralized, would the price of BTC go down or up?

[lionheart78]

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.

If Bitcoin becomes centralized, the government's fear might somehow be lessened, since there is a way for the government to control Bitcoin, then it is possible that the government will hasten the adoption of Bitcoin.  Thus there will be more infrastructure that will be build around Bitcoin and people have way more options to access and use Bitcoin thus, adoption will increase.  When there is an increase in adoption, demand will be affected directly, thus price might increase in the long run.

There might be some negative reaction, which might affect the market.  Its effect depends on how these negative reactions convince people, but in market history, if the negative reaction is not that powerful, it will only die naturally, thus the negative sentiment of the market will diminish, and the market will return to its original state.

We can take a look at ETH when it transitions from POW to PoS, at first, there is this heavy negative reaction to the point of forking the network that produces two ETH, the one that stays as PoW and the other one that implements the PoS.  At the end of the day, the one supported by the main developer became the majority and later the negative reaction on PoS ETH just died down.

The worst possibility is that Bitcoin value will drop significantly in the long term, although there may be a price surge due to faster institutional adoption, but it will only be temporary because Centralization goes against the main fundamentals of Bitcoin, namely decentralization and immunity to censorship. Centralization will leave an extreme impact on the value of Bitcoin in the long term (the potential Bearish cannot be contained) because it has lost its status as a Safe Haven and is also often considered as digital gold, this status is attached to Bitcoin because there is no government or entity that controls it.

Indeed, the worst scenario is that Bitcoin will drop significantly in the long run, but I do not think that Bitcoin price will surge upon the implementation of centralization, it is most likely to crash due to conflict of interests.  From there, if it failed to recover, then Bitcoin will indeed drop significantly in the long run and probably become worthless.  But if the market recovers and surges, I do not think the scenario you stated will take place, after all the the recovery and surges shows that Bitcoin community have accepted the changes.

[ertil]

The initial idea of Satoshi ^{that Bitcoin could be mined virtually by every household CPU} has failed.

It never was "the initial idea". There are many examples, where Satoshi talk about "server farms". For example:

Simplified Payment Verification is for lightweight client-only users who only do transactions and don't generate and don't participate in the node network.  They wouldn't need to download blocks, just the hash chain, which is currently about 2MB and very quick to verify (less than a second to verify the whole chain).  If the network becomes very large, like over 100,000 nodes, this is what we'll use to allow common users to do transactions without being full blown nodes.  At that stage, most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated.

I anticipate there will never be more than 100K nodes, probably less.  It will reach an equilibrium where it's not worth it for more nodes to join in.  The rest will be lightweight clients, which could be millions.

At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.

The current system where every user is a network node is not the intended configuration for large scale.  That would be like every Usenet user runs their own NNTP server.  The design supports letting users just be users.  The more burden it is to run a node, the fewer nodes there will be.  Those few nodes will be big server farms.  The rest will be client nodes that only do transactions and don't generate.

Forgot to add the good part about micropayments.  While I don't think Bitcoin is practical for smaller micropayments right now, it will eventually be as storage and bandwidth costs continue to fall.  If Bitcoin catches on on a big scale, it may already be the case by that time.  Another way they can become more practical is if I implement client-only mode and the number of network nodes consolidates into a smaller number of professional server farms.  Whatever size micropayments you need will eventually be practical.  I think in 5 or 10 years, the bandwidth and storage will seem trivial.

I uploaded a redesign of m0mchil's getwork to SVN rev 189 (version 31601)

m0mchil's external bitcoin miner idea has solved a lot of problems.  GPU programming is immature and hard to compile, and I didn't want to add additional dependencies to the build.  getwork allows these problems to be solved separately, with different programs for different hardware and OSes.  It's also convenient that server farms can run a single Bitcoin node and the rest only run getwork clients.

[hero_the_bossman]

I don't think it will be that simple either way. One thing for sure is that I'll probably won't hold onto my BTC for long. If the use case is basically an alternative to ETH or something else, I don't think it will be suitable to continue using a network that's controlled by a third-party. Might as well continue using fiat or digital stable coins if that was the case. I'll probably pivot to gold or something else. I wonder who would continue buying BTC. Whales definitely won't let it die, but whose money they'll take to make sure they don't get burned then?

Interesting standpoint. ETH would be no option for me.. and gold too, we wouldn't be able to use it as BTC for transactions - etc. Maybe Monero.

[Somegory]

If bitcoin was to be centralized, many people won't invest in it because it will still be same issues with centralized crypto projects. It will face a lot of manipulation by the government and they can trap people by pumping the price and after many people has invested they can dump the market and many people will suffer severe losses and the price won't rise again. The reason why bitcoin exist till now is because of its decentralized nature. Forget about ETH, XRP and SOL because even though that some of those cryptocurrency has a strong network but they are likely to disappear in the future.

I don't know what you meant by saying that most bitcoin investors use centralized means but you should know that as much as many people are trading bitcoin on CEX, there are also many investors who are strong hodlers and they still have their bitcoins in self-custody wallets.

Never think that bitcoin will reach the moon if it becomes centralized because even the government do not want you to be rich so they will never allow the price to reach zenith.

This is a big fat lie.

If people hate centralisation like how you said it why are people transacting their Bitcoin via centralised exchanges today then? If they respect Bitcoin for been decentralisation they will keep it that way, they will all stay away from CeX.

Another good point is the fact that some people are buying ETFs, isn't it? Bitcoin ETF should be lacking customers right now since they hate centralisation this much.

I will advise you to talk for yourself only, if you are here for that fact that Bitcoin is decentralised then it's you, many people don't care about this they just want to make money, whether bitcoin is centralised or decentralised they don't care.

[Odusko]

Take away decentralization and trust of the proof of work from Bitcoin an you see how Bitcoin becomes less interest for both individuals holder's institutions and other big Bitcoin holders who are holding Bitcoin for reasons aside from holding for it consership, and the social contract, which take out centralized or single entity/individual control of Bitcoin network, through it POW, trust is the most important part of Bitcoin.

[Smartprofit]

In my opinion, if all these events had happened, the price of Monero would have risen. 🙋 Monero is a cryptocurrency ideologically poised to replace Bitcoin if it collapsed. And the transition to a PoS consensus algorithm and Bitcoin's centralization would undoubtedly have led to Bitcoin's collapse.

Would the price of Bitcoin have risen if these events had happened? Perhaps, but only for a short time. Nobody wants the Bitcoin you described. Incidentally, governments and corporations wouldn't have bought it either (indeed, they would have quickly gotten rid of such a toxic asset). They would have also secretly started buying Monero. A fully centralized cryptocurrency already exists: central bank digital currencies. Partially centralized cryptocurrencies also exist: all sorts of stablecoins and other similar projects. A centralized Bitcoin is irrelevant and of no use to anyone (neither individuals, nor governments, nor corporations).  In the long term (most likely, even in the medium term), its price, in my opinion, will fall to very low values.💥

[JiiBs]

There's a condition to your question which is if, this is a probability in which they cannot be certainty to, if I am to give you an answer directly to what I see, then know that bitcoin can never turned a zero value, as long as the protocol and everything remain in consensus, also we should not think of seeing it being centralized because it is already made by default in the centralized digital currency.

It’s is a highly probable statement and while I don’t think it would drop to zero, I also don’t feel it would make the much progress it has made over the years. Decentralization remains of one the main reasons why some Bitcoin investors are rooted in the industry and with that factor out, so would the pull it has on those who see this as a vital aspect of Bitcoin. To be fair, it wouldn’t be any special.

[Lucius]

~snip~
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.

The real question is, do people invest in Bitcoin because of what it represents in its essence, or is it only important for them to profit from it? It seems to me that the majority (80% or more) do not care whether Bitcoin is decentralized or not, especially those big players who would have nothing against centralization.

I would personally be disappointed with such a development and would no longer be interested in Bitcoin because there is as much centralized garbage as you want, Bitcoin is only one and unique.

[serjent05]

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.

We all have our own speculation, but what really matters is how the community and people who are potential to embrace Bitcoin react to this sudden change.  The market value of Bitcoin can go either way depending on which one will become the majority.

If most supporters of Bitcoin rejected the changes, then we can see the price of BTC plummet, but if they embrace it, there may not much of changes.

I believe that Bitcoin losing decentralization is like losing its soul but this does not mean that people will stop patronizing it.  We might be surprised at the end if Bitcoin, despite losing its decentralization, moon because the government can fully support its adoption since there is now a centralized authority that will answer if ever something is wrong.

[PocketAurora]

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

[RibbonRaptor]

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.

We all have our own speculation, but what really matters is how the community and people who are potential to embrace Bitcoin react to this sudden change.  The market value of Bitcoin can go either way depending on which one will become the majority.

If most supporters of Bitcoin rejected the changes, then we can see the price of BTC plummet, but if they embrace it, there may not much of changes.

I believe that Bitcoin losing decentralization is like losing its soul but this does not mean that people will stop patronizing it.  We might be surprised at the end if Bitcoin, despite losing its decentralization, moon because the government can fully support its adoption since there is now a centralized authority that will answer if ever something is wrong.

i think not that simple that BTC will just moon if become centralized. maybe short term yes, price can go up because big companies and goverment feel more safe to join, more money coming in equals small pump possible. but the problem is, many people use bitcoin because no one control it, if suddenly there is central authority, then it become like normal system already, so some holders might lose trust and start selling.

also if centralized, people will think
what if rules change?
what if funds get frozen?
what if manipulation happen?

that kind of fear can affect price a lot, so for me short term it may go up a bit and for long term its more risky, can go down also. bitcoin without decentralization is not the same anymore, thats the main value of it.

[Luzin]

Decentralization is one of Bitcoin's key features. Losing this wouldn't be a good thing. In that case, whoever controls the network gets their way. They can manipulate the price however they want. Why would we want to be part of a centralized system anyway? We already have fiat currencies for that. At that point, Bitcoin would lose its purpose. It would be no different than Ripple and similar altcoins.

Yup, Satoshi Nakamoto created Bitcoin to avoid centralized control or centralization. If Bitcoin had a centralized system from the start, perhaps it wouldn’t be as good as it is today. The reason is clear, freedom. If Bitcoin followed a centralized system, then the risks would include manipulation, controlling transactions, and freezing wallets. This is the same as a centralized government system. Bitcoin has been able to survive until now because it is special no one can control it. If centralization were applied now, changing from a decentralized system to centralization, many people would start losing trust, causing its price to drop. IMO CMiiW

[Alpha Marine]

Why haven't those centralised coins that can make any transaction within seconds gone to the moon? If Bitcoin belonged to and was controlled by a particular company, it wouldn't have the kind of trust it has right now, and when people don't have trust in an asset, it would be difficult for that asset to go to the moon.

Instant transaction confirmation is not one of the major things that is hindering Bitcoin's price. The price wouldn't have been too different from what it is right now if Bitcoin transactions were confirmed within seconds like USDT and co. Meanwhile, decentralisation is one of the things that makes Bitcoin unique.
So if you give it instant confirmation and take away decentralisation, you're taking away more than you're giving, and that would not make it go to the moon.

Most other cryptos are much more centralized than Bitcoin and collectively they have about 45% of the market cap of Bitcoin. That proves that most investors don't care about centralization imho.

Millions of other projects put together are not up to 50% of the market; meanwhile, one project makes up over 50% of the market, and you think this is a point to give in this regard?
I agree that investors don't care about centralisation, but they care about where they keep their money, and if they don't trust where their money is, they won't put much of their money in it.

[snowpega]

A good perspective
I have thought about this when I reasoned how most are more concerned about price than Bitcoin.
Well it would turn bitcoin to other altcoins
Expect pump and dump manipulation (worse than this).
Bitcoin would crash
And the price would be lower than you think.
It may seem like people don't care about decentralisation
But subconsciously they trust if and believe it's would moon because of that and supply.

Firstly, my answer to OP is Yes. Because if in case bitcoin were a centralized currency, then this asset would be a more volatile asset because controlling the market for big hands would become easier in case if it were a centralized asset. Or the chances are even higher that this category could lead Bitcoin to a dead coin. So, what makes it stronger is that it is a decentralized asset, and it gives more power to its holder and owner.

And other than this, I agree with most of your statements, and all these characters will convert bitcoin into a shitcoin, in my point of view. And then the tag of crypto king, which is Bitcoin, would not hold anymore by this asset, and this is a big sign that this currency will be more considered as an altcoin category. What do you think about it? CMIIW!

[legiteum]

You are right that the market can be manipulated. But centralising the system would make manipulation easier.

How? Bitcoin is massively manipulated NOW. Why would changing the technical architecture behind that increase or decrease the ease at which this is done?

If you remove all the core components of Bitcoin just to make it centralized this won't be Bitcoin anymore. This would be a centralized payment system with the name "Bitcoin" on top of it.

And for 95% of investors in Bitcoin, I would argue, that's all they care about. Tell these people that Bitcoin can now take over all of the payments in the world and I think they will all buy a lot more. Maybe the %5 will sell theirs, but it won't make up for it.

Bitcoin would most likely look exactly like Ripple, if it becomes centralized. Do you like Ripple?

It's too slow and expensive for my tastes , but lots of people obviously like it since its market cap is in the billions of dollars.

In my opinion, if all these events had happened, the price of Monero would have risen.

The fact that Monero remains relatively small in market cap is evidence that Bitcoin would go up, not down if you made it faster and cheaper through more centralization. Monero is everything "decentralized" about Bitcoin, but much more, and it's not very popular in comparison to Bitcoin.

also if centralized, people will think
what if rules change?
what if funds get frozen?
what if manipulation happen?

People would have those same fears about the (fully centralized) mechanisms they use to actually buy Bitcoin, and guess what? They don't care. Almost everybody already buys Bitcoin in a centralized way with a broker, an app, or the ETFs.

Why haven't those centralised coins that can make any transaction within seconds gone to the moon?

Well, non-Bitcoin market cap for those other big coins is about 80-90% of the size of Bitcoin's.

Meanwhile, Bitcoin was the first and obviously has the biggest brand name BY FAR (most average people have only heard of the word, "Bitcoin" and nothing else).

In that context, it's actually pretty amazing--and foreboding for the future of Bitcoin--that these competitors have done so well.

This conversation feels like, "why is MySpace #1 and Facebook and the others so small?" in about 2006. Markets change, and you need to look at momentum, not where things are at the current instant.

Millions of other projects put together are not up to 50% of the market; meanwhile, one project makes up over 50% of the market, and you think this is a point to give in this regard?

Almost all of the non-Bitcoin market cap is within the top 4-5 competitors. They are serious competitors to Bitcoin and to ignore this is to make the same mistake that thousands of other now-dead products have made in the past.

[Supreme Donvic]

One thing I want you to understand is that bitcoin was the first crypto coin that was created, bitcoin was the coin that gave other crypto coin this adoption they have right now if bitcoin was centralized people wouldn't have invested in Bitcoin the way they are doing now and that would have led to a lot of centralized coin not being adopted the way they are being adopted right now, the reason why people are still adopting centralized coin even after knowing that they are centralized is because they believe they can still make profit from it the same way they did from Bitcoin.
But I believe if bitcoin was centralized it would have been growing the same way it is doing right now but the impact that bitcoin is making now would not have been so if bitcoin was centralized, because those that are investing in Bitcoin won't be relaxed the way they are right now, and again I don't think any country or state we find bitcoin good to invest in.

[legiteum]

One thing I want you to understand is that bitcoin was the first crypto coin that was created, bitcoin was the coin that gave other crypto coin this adoption they have [...]

Yep, without IBM, there would be no Apple.

Without MySpace there would be no Facebook.

Without Netscape there would be no... Bitcoin or anything else .

See anything in common with any of those companies who invented the market? That's right, they are all diminished into obscurity now.

In fact, it's actually kind of rare that the company or product who invents the market actually stays around to dominate the market for the long run. Why, it's because... of attitudes like you see here in Bitcointalk imho! ).