mining theory – Could the threat of centralization be realized if a sufficiently large entity acquired enough Bitcoin?

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Bitcoin has always been against that type of centralization, but if one of these entities decided they wanted to gain centralized control, could they do that by taking the action of acquiring a majority of the coins in circulation?

Bitcoin network’s token (currency) BTC can be accumulated by anyone in the world by:

  1. Exchanging other currencies for BTC
  2. Mining
  3. Get paid in BTC

There is nothing in the protocol that takes care of distribution. Everyone owning similar amounts is only possible in an ideal world or some game. In practice some people will always own more than others.

Do they control Bitcoin?

No. Alice has 1000 BTC and Bob has 1 BTC. Alice has no special permissions to change the consensus rules.

Process for soft forks:

  1. Create BIP and share with others. Discuss everything involved.

  2. Code implementation

  3. If MASF:

    • Miners signalling readiness
    • Locked in if signalling % according to BIP
    • Activated

    Else if UASF:

    • Miners signalling readiness
    • Locked in irrespective of signalling %
    • Activated
  4. Miners can follow the new consensus rules else their blocks will be rejected by full nodes. Economic nodes play an important role.

None of the above mentioned things involve supply of bitcoin. Maybe people with more money can have some influence but 2017 soft fork proved that closed door meetings, corporates, miners etc. cannot decide things for Bitcoin ignoring users, devs and decentralization.



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