Crypto

Is bitcoin centralized? Discussions resumed



Centralization (decentralization) is the most important feature that allows cryptographic money to be accepted around the world. At the same time, decentralization is a philosophy that Bitcoin put forward for the first time and then adopted by all other crypto-money. This generally means that no one has overall control of the existence.

But when you look at the statistics, it appears that many of the crypto currencies of the market circulation are in the hands of a small number of people, and Bitcoin is no exception. A new report published today by Finance Magnates addresses this issue. According to the report, Bitcoin investors below 1% have the capacity to control 35% of their total assets. This brings back the debate that Bitcoin is indeed not so centralized. Finance Magnates's report includes the following statements on the subject:

According to the data of BitInfoCharts, there are 11 million accounts holding Bitcoin in the world. Of these, only 1,000 (about 0.009%) are controlling 35.4% of Bitcoin on the market.

What does this mean?

This means that the top 1% of the population has the unique power to change the network in its favor say. It may go to policy changes that will first affect the value of the entity, such as a government or a bank that represents the central authority. So, if there is no authority for decentralization to change the basic politics, Bitcoin is clearly not centralized in the light of this data.

Why investors can misuse their power

While they are open to debate scenarios about how investors can exploit these forces, it is quite simple why they want to do it. If they have the ability to set the values ‚Äč‚Äčindirectly to the point they want, that is, if they have the opportunity to sell at the desired value when buying and purchasing the region they want, why would not they want to use such an opportunity? In the Finance Magnates report there is the following statement on the subject:

In practical terms, this level of centralization means that people with large amounts of BTC have a disturbing amount of control over the market value of BTC. If one or more people suddenly choose to sell their assets, the BTC's price may be dragged down. Smaller investors buy their assets from the low level, while the whales buy them out of the panic wave. This cycle continues so.

The real peoblem in the definition of the "decentralized" word

Even if we believe that these investors will never make such opportunities, they have the power to do it realistically. The important thing is to see this power. This is not Bitcoin's fault or a problem with Bitcoin. The real problem is in the definition of "decentralized". Cryptodaily

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