Will Bitcoin Follow the Internet's Path to Practical Centralization? \ stacker news ~AskSN

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Will Bitcoin Follow the Internet's Path to Practical Centralization?

1051 sats \ 17 comments \ @klk 11 Jun AskSN

I've been thinking about Bitcoin's long-term trajectory and whether it might mirror what happened with the internet.

The Internet Parallel:

Started as a decentralized protocol among tech enthusiasts
Remained fundamentally decentralized and "based"
But in practice, most users experience it through centralized gatekeepers:
- Google Chrome + Google Search
- Twitter/Reddit/Instagram for content
- Amazon for commerce

The Counter-Examples:

Of course, some of us still use:

Firefox + Kagi
Nostr/Stacker.news/RSS feeds
XMPP/Matrix/... for communications

And the internet is still vastly more decentralized and censorship-resistant than the pre-internet world.

The Bitcoin Question:

Will Bitcoin face similar practical centralization pressures? Will most people end up using Bitcoin through a handful of corporate interfaces while the underlying protocol remains decentralized?

Root Cause:

Is this centralization tendency due to:

Human nature - people preferring convenience over sovereignty?
Broken money systems that enable these mega-corporations to capture markets?

What do you think? Is practical centralization inevitable for successful decentralized protocols, or can Bitcoin chart a different course?

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255 sats \ 3 replies \ @nullcount 11 Jun

The term "sovereign" implies having the highest power within a specific domain or territory. The Bitcoin protocol gives sovereignty to anyone who manages to sign a transaction with a private key and include that tx into a block using their own node and hashrate to mine the block.

How sovereign are you really when you don't have at least an exahash worth of ASICs to ensure your transactions are mined in a timely manner?

How sovereign are you really if your wallet isn't using your own node to broadcast your txns?

How sovereign do YOU really want to become with respect to your money?

Maybe you care about sovereignty and go all the way, self-custody, run a node, start a mining farm, etc. That's great!

Now, consider how sovereign are you really when your Tor node is unreachable at the checkout line in Steak and Shake? Or your mining farm is making you poor because your electricity isn't free. Or, Satoshi forbid, you lost your private keys!

Just because you HAD the highest power attainable by using BTC, does not mean you get to actually keep that power, or even exercise that power. There is tremendous responsibility associated with holding this power and wielding it practically in your everyday dealings.

Most of us have a job and responsibilities already and don't want to (or can't afford to) become the "highest power" with respect to the infrastructure that backs our money. And frankly, nobody should have to take on additional responsibilities to start using better money. The best money should "just work". The more you need to understand to use the money, the worse it is at truly being a medium of exchange.

115 sats \ 1 reply \ @klk OP 11 Jun

If you wish to make an apple pie from scratch, you must first invent the universe.

I think sovereignty is gradual, not binary.

Same as it happens on the internet. You don't need to run your own email server. What's important is that you can.

If Gmail had been like Proton Mail from the beginning, Proton Mail wouldn't exist and there would be less self hosted servers.

Enshittification in centralized systems is necessary and has a severe negative impact (e.g., democratic systems). But in open protocols, such as the internet, closing the doors to Twitter/X just results in Nostr getting more popular.

So even without an exahash you can get transactions through easily. And centralization and censorship from large pools just push Bitcoiners to create better pools (braiins, ocean) and get some more hashrate.

0 sats \ 0 replies \ @moptosh 11 Jun

interesting as an approach

80 sats \ 0 replies \ @seashell 12 Jun

How sovereign do YOU really want to become with respect to your money?

This is the right question. Most don’t want full sovereignty they want just enough to escape inflation or censorship, but not enough to feel the weight of responsibility. But that’s fine. Bitcoin doesn’t need mass sovereignty it just needs a critical minority that insists on it. The rest will free ride on the work of node runners, devs, miners, and plebs who care more about freedom than convenience. Sovereignty isn’t all or nothing it’s an asymmetric weapon. Even if 99% use custodial wallets, the 1% who don’t still define the credible threat that keeps the whole system honest. Bitcoin gives us power. Most won’t use it, but the point is they can.

269 sats \ 0 replies \ @freetx 11 Jun

And the internet is still vastly more decentralized and censorship-resistant than the pre-internet world.

I think that is ultimately the answer, which is: Yes bitcoin will eventually (unfortunately) undergo massive centralization. As the masses join the system, control will cede into larger and larger silos of centralization.

However, much like the modern internet, it will still be possible to use bitcoin in a pure P2P fashion. At the protocol level, bitcoin will probably remain 'decentralized', its just that for convenience purposes, >95% will choose to use it in a completely custodial fashion.

174 sats \ 0 replies \ @OT 11 Jun

It seems like it will. Unless the vast majority of people start getting down the rabbit hole and caring more about sovereignty.

I still think we should aim high. If the experience of living a sovereign and private life of abundance is seen and is clear as day, it should motivate people to learn.

120 sats \ 0 replies \ @moptosh 11 Jun

If Bitcoin were easy to understand, everyone would already know about it. Mass adoption will only happen if the general public doesn’t have to make any effort just like with Visa or Mastercard without needing to understand the paradigm shift of decentralization. For most people, it’s just another payment method different, but too speculative and too volatile. They prefer the stock market or gold. The only thing that could make them change their minds and take an interest is a black swan.

91 sats \ 0 replies \ @didiplaywell 11 Jun

You said it yourself: the internet remained decentralized and became even more decentralized, and it happened in parallel to the advent of centralized services. That's causality, not coincidence. Competence among services ensures the internet will remain decentralized, for no player wants to be at the mercy of the other, and the same will happen to bitcoin. Decentralization will remain in the hands of people via entrepreneurship and competence among services. That's the fundamental division of work mechanism that will allow bitcoin to become people's money. Do not neglect decentralization of services out of the equation. Do take the internet as an example of that. We see yet another immediate example of exactly that with Nostr and the development of its clients, who for the sake of their business implemented more and better relays.

70 sats \ 0 replies \ @Riberet 11 Jun

Most people still don't understand Bitcoin, and many of those who "understand It", do see it as a purely speculative tool. At this rate, I think centralization is very likely in the future. If Bitcoin were easier to understand, widespread adoption should have already occurred.

0 sats \ 7 replies \ @Solomonsatoshi 11 Jun

Good questions to ask.

IMO Bitcoin is already being captured and controlled by the bankers and governments it was created to free us from. They are cunning MFers and they are not going to surrender their slavery of the masses without a fight.

Is the cause lost ? - I do not accept that- if enough of us want freedom then we need to fight for it. Look at what has happened to Linux- yes we can still use it as individuals, but very few do- it is mostly used behind the scenes by the corporate surveillance state to control the masses who have been slyly shepherded onto the mind control malware called windows, android and apple.

7 sats \ 6 replies \ @klk OP 11 Jun

I think that banks and governments using Bitcoin is part of the process. And something that would obviously happen.

Freedom money is also “free” and unstoppable for your enemies. That's part of its nature.

But it doesn't make it less valuable to the rest of us. We can still do exactly the same things that we could before that “capture”.

So it's actually the same that happened with Linux. Now even Microsoft uses Linux. And well a lot of non-techy people on their Android phones. But big tech using Linux does not take anything away from libertarian geeks that want to use it.

0 sats \ 5 replies \ @Solomonsatoshi 11 Jun

So as ETFs and corporate and nation state Treasuries acquire more and more of the total issuance an increasingly small portion of total issuance might remain in the hands of individuals who can still technically use it for p2p payments- but very few will use it for that purpose because the vast majority of commerce will remain denominated and transacted in fiat money and anyway the vast majority still held in private hands will be held with the hope and intent of speculative gain- KYCed and taxed. Bitcoin will not have scaled to a degree where it is a viable alternative for payments. It will have been captured and controlled as a relatively harmless KYCed and taxed speculative commodity.

0 sats \ 4 replies \ @klk OP 11 Jun

Google has most of the Internet traffic yet here we are discussing on SN and zapping sats. Internet is not a zero sum game. There's not a limited traffic of which google captures a large quota. Google can grow in traffic and SN as well.

We don't need a certain amount of coins. Any amount of limited supply coins is perfectly fine. If ETFs want to get 80% of the supply, that just makes bitcoin the largest asset class in the world and the remaining coins extremely valuable.

0 sats \ 3 replies \ @Solomonsatoshi 11 Jun

If use of Bitcoin as a MoE does not grow then it fails to become a practical p2p payments alternative to fiat money. It becomes instead a KYCed and taxed speculative commodity that is almost exclusively hoarded, and not used for MoE. And this is exactly what is happening.

0 sats \ 2 replies \ @klk OP 11 Jun

Bitcoin growing as a MoE is compatible with ETFs acquiring Bitcoin.

Bitcoin grows as a MoE if it's used as such. With or without ETFs. ETFs acquiring Bitcoin just make number go up which push Bitcoin into a more valuable store of value. Which is necessary for it being used as MoE. Bitcoin is antifragile in this sense.

Just needs to stay decentralized and secure as a protocol. And luckily, unlike shitcoins like Ethereum, that does not depend on who holds the coins.

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