A highly centralized ownership situation that leads to forks that rot Bitcoin from the inside.

Theoretically, with a homos economicus mindset, Bitcoin never changes its ruleset into something that hurts decentralization since we already have a highly decentralized owner base that would defend themselves.

In practical terms, a lot of the people that "have" Bitcoin use centralized custodians such as exchanges and ETFs. In fork situations, their custodians have the ultimate power to decide. Plus, the profile of someone who leaves their stack with a custodian is probably not the one that will do a lot of research into Bitcoin internals and have strong opinions on what's the right thing to do in a fork.

So, how's this an issue? You might be thinking to yourself that you can always run whatever version you want of a node, so you don't mind people forking nor big players supporting it.

I also thought that way, but an OG from the blocksized wars opened my eyes to one issue: if someone has a lot of Bitcoin, they have a lot of ammo to shoot during a fork situation.

Imagine this:

• Large custodians, corporations and other institutions in the western block hold 10% of Bitcoin's supply.
• The USG promotes a fork, let's call it GovCoin. It's somehow way worse that Bitcoin in terms of Bitcoin ethos: centralized, not free, not private.
  Whatever distopian 1984 nightmare you want to think of.
• Whenever the fork happens, people are going to be able to trade GovCoin and Bitcoin. The exchange rate across both determines the popularity and adoption of each. It's a bit of a financial war or a chicken game. If everyone holds tight their Bitcoin and dumps their GovCoin, GovCoin-Bitcoin goes to shit and the fork becomes a joke. This has already happened in the past with Bitcoin Cash and the like. You might still think that you could use Bitcoin if it goes to shit, but if Bitcoin takes a massive, long term value hit, it loses the NgU feature that drives most adoption and the game theory around it can crumble.
• To successfully push GovCoin, the USG simultaneously:
  • Orders everyone to hand in their Bitcoin and use GovCoin, including the big players. Blackrock, Fidelity, JP Morgan, ... These guys are not going to oppose the USG. lf anything, they would probably have a stake in this whole operation.
  • Stores the confiscated Bitcoin, preventing those holdings from being used in the exchange rate financial war.

You can continue imagining.

So, I guess, what would make me lose my conviction is watching almost everyone in Bitcoin using large, state capturable custodians.

Or just more generally, people being submissive cowards.