Bitcoin is something that gets a lot of attention these days. When it comes to dealing with the problems we presently face, many will tell us Bitcoin is the solution. Is this really the case?
To answer this question, we need to dive into many different pools to see what is going on.
Bitcoin maximalists promise us that Bitcoin will solve all that ails us. It is the solution to our money problems and will make the world a better place. For years, we were told this is "the people's money".
Throughout that time, some asserted that Bitcoin was a creation of the NSA, CIA or some other alphabet agency of the US government. Others content it was some concerned for humanity cypherpunks.
Whatever the original, we will delve into it in this article.
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Bitcoin On A Path To Tyranny?
Could Bitcoin take us even deeper into a tyrannical state around the world? We will look at the different facets of the system to come up with an answer.
Before getting into that, let us start by highlighting what the most valuable contribution of Bitcoin. It certainly was revolutionary. While many focus upon the money, there is something that forever changed the world.
Bitcoin biggest contribution to humanity was the ability to arrive at consensus in a decentralized manner.
Think about that for a second. This is the first time in human history this was possible. Our entire system is filled with "trust agents", institutions that are designed to have provide confidence to the general public. Unfortunately, we all know how this can fail.
Previous attempts at electronic currency ran into a wall when it came to consensus. It was Bitcoin that pushed through the barrier and gave the world its greatest gift.
Over the next few decades, we will likely see a massive amount of disruption as trust is realigned, employing decentralized consensus mechanisms. This will extend far beyond simply facilitating financial transactions.
Which brings us to Bitcoin.
One thing we have to establish is the two factors that apply to this network. Coin distribution has nothing to do with the network. That is rather unique and requires looking at both individually.
Network
The Bitcoin network employs the Proof-of-Work consensus mechanism.
From the outset, the goal was basically to back the system with energy. Presently, specialized computers, all over the world, work to solve mathematical equations in an effort to earn the right to produce the next block.
What started out as something that was done using a basic computer now requires expensive hardware. miners can run into the tens of thousands of dollars apiece and often require a multitude to make any money. This is why mining pools became so popular.
Here is where the first problem can arise.
In the United States, there are 5 mining companies that are publicly traded. Blackrock is investing in 4 out of the 5.
The running of the network in a decentralized manner is crucial. What happens if Wall Street institutions and venture capital firms start to drop big money on the mining companies? We can follow the one that are on public markets. We honestly have no idea what is taking place with the private miners.
Naturally, there are entities all over the world yet they all face the same problem. This is not a network run by thousands of individuals. There are a handful of entities that control the majority of the hash. Could that be leveraged over time?
Some will claim it is impossible. That might be the case. However, a 51% attack take place if Wall Street and associated entities start to gain control. If it becomes a money game, they excel at this.
Coin Distribution
From a network perspective, this means nothing. Nevertheless, it is a part of the narrative pertaining to Bitcoin as a new form of money.
If this is the case, we have a major problem.
Historically, fixed money always pools. Bitcoin is no different. Early on, people took exception to that idea yet we see it happening before our eyes. Wall Street is completely hijacking Bitcoin and many are cheering.
For years people applauded Michael Saylor and his firm's buying of Bitcoin. The same results were met when the Bitcoin ETF was approved by the SEC.
In the last two months, the money pouring into those funds has exploded. The Bitcoin held by Blackrocks now surpasses Microstrategy. All of this is being held by some Wall Street firm acting as the custodian.
So much for the "not your keys, not your coins".
If people like Saylor are correct, what kind of world will we have if Bitcoin is indeed the main form of money? Do you think everyone will have it? Fixed money always pools and this means most people will not have any of it.
Transaction Fees
This could be an article unto itself so we will touch upon some of the highlights.
Bitcoin is a very inefficient network. There could be a case made that the security provided is worth the inefficiency. However, outside of that, it is not designed to handle many transactions.
Since it doesn't scale, the fees respond by increasing along with activity. This impacts the utility of the network especially on smaller transactions.
The response to this is to move the transactions to a second layer. Presently, we see the Lightning Network as the probable answer. The challenge here is Bitcoin incentives are only on the base layer. There is no incentive structure for Lightning.
This calls into question who is going to run these nodes? Some believe that people will simply do it from the perspective of being anarchists or "sticking it to the man". While a few might, that isn't going to process billions of dollars worth of activity.
For that to occur, some big players have to step who. What institution is going to do this without incentive? The answer is nobody. Hence, the solution is gaining value in some other way. Is there a way to take activity that occurs on your network that costs you money yet you end up monetizing? This is the social media scenario, perfected by Facebook (Meta).
A logical conclusion is major financial institutions will run nodes since they can monetize in other ways. The cost is simply one of doing business and they can augment their other services through this. Of course, this brings up the proverbial KYC and having to adhere to regulations.
It would appear this layer is going to be hijacked also. Even if the miners remain unimpeded, far from a guarantee, the fees might be so high it is unusable for the average person. If it costs $1K for a transfer, it is going to exclude a lot of people.
The only solution is, so far, Lightning. Yet what happens if this is mostly run by major entities that all have KYC. We are right back in the hands of the banking cartel.
Green Candle People
Most of the excitement around Bitcoin (cryptocurrency in general) is "price go up". This is not necessarily a negative since people making money is a positive. However, when it comes to Bitcoin, there is a lot of short-sightedness.
Becoming a Bitcoin millionaire is a wonderful thing. That said, it does not mean one is free. Have you noticed what the US Government did to Russian assets? It froze the accounts that are held by individual Russians, not the government. They were not freezing Putin's money.
Now there is a push to take that money and give it to Ukraine to pay for the war.
The lesson hear is these governments have no problem weaponizing the financial arena. What happens if you have a few million in Bitcoin and you are targeted? If you don't think it could happen, consider this:
For the sake of discussion, let's presume the power shifts East. Instead of Wall Street, it is the giant Chinese banks that start to take over. They invest in the mining pools, run Lightning nodes, and are the massive financial center.
Next, in our scenario, the Chinese government decides it will freeze the Bitcoin of all US citizens. While this might not be possible on the main layer, the transaction fees might prevent movement for most of the money. Here is where you want to turn to Lightning but, surprise, the Chinese banks do not allow it.
Hence your money is effectively frozen.
Is this far-fetched? Considering what is happening with Wall Street, I do not think it is. There is one thing we can all agree upon, the bankers are not going to act in the interest of the average person.
Tyranny
The problem with tyranny is it changed.
While it is easy to point to a North Korea, that is not how tyranny happens in the 21st century. Governments tend not to be direct their their exertion of power.
What we described here is exactly how governments operate. They do not control the population. That is too difficult. Instead, they put the screws to the institutions that people deal with. This way, they are dealing with a handful of players who they can control.
This is usually done through a combination of force and incentives. The banks, as an example, are regulated while also allowed to get away with what would be crimes by anyone else. It is far easier for the government to control JP Morgan as opposed the 66 million customers Chase has.
We will have to watch but the hijacking of Bitcoin by Wall Street, on the different levels, is cause for concern. It ultimately could feed into the hands of governments as they will be able to exert complete control over it, albeit indirectly.
Either way, I do not think it is the path to freedom many assert.
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Bitcoin fees are not going up over time which is a primary condition of this thesis.
Until Bitcoin fees actually go up and stay up anyone can use BTC, even poor people.
Also all other blockchains evolved as a direct result of Bitcoin.
It is an insult to assume otherwise.
So even if Bitcoin get's co-opted we still have all these other protocols to play with.
And that's because Bitcoin exists.
To frame it within this new narrative is a conflict of interest that nobody should take seriously because every path leads back to "here's why you should buy my token".
Then again I'm guessing you already saw the discussion on Twitter.
So I'm repeating myself.
Saw your comment, thought I'd weigh in:
Your argument about BTC fees here ...
... falls flat because there are relatively few BTC transactions per block. If the Bitcoin network would have to process as many transactions as for example the Solana protocol, then watch Bitcoin's transaction fees skyrocket.
The main reason there are so relatively few Bitcoin transactions in my opinion is its fixed supply and incrementally decreased flow over time (block reward halvings), which causes people to hoard and not spend their Bitcoin as they expect the value to increase over time. In that regard Bitcoin has thus far failed its original objective, being to serve as digital money.
ps, do not get me wrong here, I am and have been a long-time Bitcoin supporter but I 100% agree here with @taskmaster4450 in that Bitcoin's PoW protocol incentivizes network centralisation which over time converges to only 1 majority miner controlling > 50% of hashrate.
Right well you just completely undermined your own argument by making a comparison to Solana... the most centralized VC chain that constantly halts. How could Solana of all things be the solution to decentralization?
As pristine collateral Bitcoin isn't supposed to exchange hands often by design. It's supposed to be an antifragile network that never goes down and can take any beating that gets thrown at it. The use-cause of Solana isn't even comparable to that in any way.
The data being presented to us is incontestable. We all collectively decided in 2017 when price was around $15k that $50 fees were unacceptable and going to be a problem. Now we are trading at $70k and the cost of fees should be much higher in theory. They are not. I did a Bitcoin operation yesterday for $3. Our hypothesis was proven incorrect, and yet many of us have refused to admit it and carry on making assumptions based on the hypothesis being true, which we already know it isn't after 7 years of in-the-field testing.
That would be a bad guess.
Haha I thought it might be.
Oh well these things happen.
Guesses by their nature are shots in the dark. LOL
OK, BTC fees remain low. That is what you are staking this on?
You are the first bitcoiner I have heard say this. If the fees remain low, good for the world. Ill happily be the first person in crypto to say i was wrong about the fees on BTC.
Couldn’t say it better myself! 💯
Politically speaking, I see this happening in the future.
I might not understand economics and monetary system well. But with Bitcoin giving us the freedom to generate and manage currency without government restrictions and border limitations, the path to tyranny is inevitable
I think you contradicted yourself on that one.
I share your concerns about BTC.
I love you for this open and public awareness, although some still see it as a suggestion. BTC is not to be joked with. I just hope the fees doesn't kick up high before this evolution of tyranny. I love the idea and I believe the future is brighter
BTC is just becoming the next gold. It is a premium asset that big corporations invest in. I do believe the path to freedom will be in the Alts. We will see a lot of things get tokenized, and that is when we see control get less and less.
I believe you are going to see bigger players than corporations after it.
This would likely be sovereign wealth funds and central banks.
Thanks for shedding light on the complexities surrounding Bitcoin's journey.
Your insights about its potential impact on society and the risks of centralized control are thought-provoking.
It's crucial for us to remain vigilant and critically evaluate the promises and challenges of Bitcoin as we navigate the future of digital currencies.
Great food for thought!
#inleo
subject to even distribution of Bitcoin.
Yeah, reconciliation of contrasting opinions. But at the same time it is an imperative becasue without consensus you cn not mainatin the state of the Blockchain.
Maybe if we can find a way to leverage the crowd that buy's lottery tickets to instead buy a "coinbase lotto block" award without getting too techy. Instead of dividing up the block reward like mining pools do, promise the whole block reward as a prize. I think that's why mining pool operators don't do this. Their owners are seeking control, not decentralization.
I would say control is inherent with ownership.
To believe the narrative is otherwise is likely going to fail. The key is to decentralized the control. If anyone could run a mining right cost effectively and have a decent chance at getting a payout once in a while, then perhaps it could fly.
Since that isnt the case, we see the mining pools and what they want to do. Ownership means they control.
And now their master is becoming the likes of Blackrock.
Thanks for your indepth look at Bitcoin and the possibility of btc being controlled by govenerments - Tyranny @taskmaster4450.
I am very concerned about what Blackrock is doing! I am very upset with the Patriot Act the banks can use to close your account for no reason and know everything about you. The banks are literally making people homeless. They steal your money! It is awful! They are horrible entities that need more regulation and they need to stop invading other peoples lives, stealing their money, and outright causing a person to get more and more in debt! They are stealing everything from many innocent people. This is my sermon for today @taskmaster4450.
OMG! I didn't know that our government froze innocent peoples bank accounts in Russia!!! They are doing it over here too silently! If the banks don't like you they put you on a black list and follow you and freeze and close your accounts! This causes a person to go into more debt and it's because of this action that the banks keep getting richer!!!!
Hive needs to be made so no government can control it ever!!!
OK have a great day all :)
Barb
Posted using CTPtalk
Bankers are bankers.
In the US, they never get thrown in jail no matter what they do. The Patriot Act is nothing. The stuff the banks can legally do is absurd.
Of course, that is only dealing with the regulated system. Their global system is even more absurd.
Thank you for your input @taskmaster4450le 😊👍 !BBH !CTP
@taskmaster4450le! Your Content Is Awesome so I just sent 1 $BBH (Bitcoin Backed Hive) to your account on behalf of @adcreatordesign. (1/1)
Thank you @bbhbot 😊
I think you suspicion is right. Bitcoin chat its own course all by itself. No regulations; no third party, then I think it's actually a tyrant
This is sadly true, so many events happening lately across different countries Government has proven even to the blind how they all operate.
Visiting your in-depth knowledgeable write-up, from #dreemport
BTC can solve the way money is capitalized and a redistribution of funds among normal people can be possible. Anyway in the realm of crypto world nothing is limited and we might see what we haven’t seen for years before, that is possible.
Governments would try their best to have a grip and control over thr financial life of their people and also the enemies. You mentioned international regime players and the tricks used to freeze and control opponents money, I apprehend BTC would be a tool to be used frequently to avail the intention.
But hopefully despite the odds, we might see a better days ahead in the sector.
“Could Bitcoin take us even deeper into a tyrannical state around the world?”. Short answer no. Bitcoin is pro freedom. There is no Hive without Bitcoin.
Bitcoin has proven many people wrong and silently trade on $73000 🚀
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STOPTo support your work, I also upvoted your post!
Bitcoin fees are currently not increasing. As long as Bitcoin fees remain low anyone can get binefit. As all roads show back to a particular token.
The whole thing is kind of complicated. Governments all over the world looking for ways to just control everything...
From #dreemport, I am a #dreemerforlife
I am really afraid of the prices of Bitcoin price and transaction fee most especially when we are still in the bull run kick-start and it is already high like this. Well let's hope something is done
This is definitely the darkest timeline, but it is now a risk because BTC is pooling into the hands of few. Truth be told, it is one of the reasons I'm heavy in $IBIT in my 401K portfolio. Might as well get in with the big dog!
I beg to disagree. Bitcoin is the only path to freedom. The technology is 100% uptime for the past fifteen years. It 100% reliable and 100% intangible. Zero employees and No ID required to use it.
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