Bitcoin: it’s not decentralized

One of my favorite lines is, “no one is gonna get rich with Bitcoin.” People may debate it, use it, hold conferences about it, and watch YouTube videos of Andreas Antonopoulos (who looks like a Guild Navigator from Dune)–but no one is gonna actually get rich with it.

To reiterate, my prediction is Bitcoin (and all the other coins) will keep falling.

As it turns out, Bitcoin is NOT decentralized. It does NOT eliminate the middleman. It is more centralized than fiat or gold.

Here is Andreas Antonopoulos:

Um, technically, that is not quite true. The key is merely a correspondence between a public address and private one. That is all. The key does bestow some sort of magical right to spend your Bitcoin. When you use Bitcoin, unlike fiat, if goes through a middleman–the miners. Instead of simply handing a dollar bill to the clerk, you are first handing it to a ‘processing center’ that then hands that bill to the clerk. Not exactly decentralized. So far, this processing center does not discriminate, hence maintaining Bitcoin fungibility, but there is no guarantee it will remain this way in the future. As it turns out, there is nothing to stop miners from colluding and in theory freezing people from their money. Miners are run by People, not autonomous scripts, and people can break the rules, much like how Vitalik Buterin and the Ethereum team held an emergency meeting to bailout the DAO by forking the chain, hence annulling ‘code infallibility’.

Read it and weep:

How could it be resolved? Fundamentally the network is controlled by a majority of the hash power. If a supermajority of the miners decided to block an address, then there is no resolution: the majority rules. In a way, this is a feature. No one with the majority of the hash power would do this indiscriminately: it would jeopardize the network. But if the network determined that a particular address or addresses was a threat to the network, then the miners could band together and defend the network from that threat.

This has never happened and it’s unlikely it ever will (because it would potentially jeopardize the integrity of Bitcoin), but its’ still a possibility. Moenro, because it’s decentralized and does not rely on ASICs, does not have this problem.