|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cryptocurrency News Articles
Bitcoin Maximalists Face an Inherent Paradox as Institutional Influence Grows
Sep 30, 2024 at 05:05 pm
Bitcoin was created in response to the 2008 financial crisis as the people's currency to bypass the manipulation and mismanagement of the financial systems by governments
Bitcoin was created in response to the 2008 financial crisis as a people’s currency to bypass the manipulation and mismanagement of the financial systems by governments, financial institutions and special interest groups.
But today, Bitcoin ownership is far from evenly distributed. According to data from BitInfoCharts, 6.5% of total wallets hold 98% of Bitcoins, and institutional activity is read as “major gains” in the eyes of the everyday Bitcoin holder.
Promises of financial gains are overriding any allegiance to decentralized principles. There is an emanating “look the other way" that neglects the very real scenario in which Bitcoin becomes indistinguishable from a traditional financial asset.
We saw lines blur with Venezuela’s attempt to support the Bolivar with the self-created Petro backed by the nation's oil reserves.
While thwarted, plenty of other power-grabbing initiatives are clearly unfolding at an alarming rate. The government of El Salvador is buying one Bitcoin a day; the FBI recently warned that North Korea is using social engineering schemes to steal Bitcoin; and US-based MicroStrategy holds nearly 250,000 Bitcoins.
Soon, Bitcoin may be inseparable from the influence of traditional capital markets. Being in a position where Bitcoin price moves in sync with stocks and interest rates is a dangerous place.
Failure to curtail growing institutional influence on Bitcoin could result in “centralized decentralized finance.”
Recent: 6 things the US needs to stay competitive in crypto, according to execs
At ground level, this could extend to institutional influence over mining operations and node providers, undermining principles of distributed control. If corporate interests meld into blockchains themselves, not just into cryptocurrencies, ecosystems could become susceptible to data manipulation and censorship measures. Big top-down decisions could start to compromise privacy and pseudonymity customs. Eventually regulatory advances could yield.
Acceptance Is key
Dystopian doom is not an inevitable outcome. The onus to act, with purpose, still lies with crypto natives, and more specifically those who claim to be Bitcoin maximalists.
While institutional dominion looms, the more immediate problem is the belief that Bitcoin as a people’s currency is a utopian idea that isn’t grounded in reality.
The sooner it is accepted that Bitcoin may be treated like any other asset, the sooner that full focus can be given to maximizing its value for everyone. If global crypto adoption is to truly manifest, minds must change and grass roots action must be taken.
Crypto investors, innovators, and influencers must recognize their power. Their decisions can greatly influence the market in ways that extend beyond their investments.
Through the projects they interact with, the way they talk about crypto, and the information that they seek and share, Bitcoin’s sovereign potential can still be championed.
Open-source initiatives that target core communities must be propagated sufficiently. Those such as the OpenSats Education Initiative, a grant-oriented scheme that delivers educational content for all levels of expertise, encourage people to obtain knowledge rather than chase profits.
It is ultimately the expansion of knowledge that will birth new innovative utilities of Bitcoin and drive its value to a greater degree than investment can.
In placing open-source projects at the front and center, blockchain technology is kept accessible to everyone, in spite of rising institutional investment. Crypto enthusiasts and everyday investors will always maintain sovereignty over the initiatives that they engage with. They must thus be diligent in favoring those that promote decentralized principles.
Expanding decentralized governance
The rise of decentralized autonomous organizations must also be respected and expanded upon. Decentralized governance as a notion is the most transformative quality of blockchain technology.
Of course, the intended revolution is centered in finance, but the industry must not pass on the chance to change how other systems are governed. In fact, the risk of institutions dominating Bitcoin should inspire the community to double-down on innovating governance models.
This could include more participation in Bitcoin Improvement Proposals, where anyone can propose changes to the Bitcoin protocol. Individuals must use their power to influence decisions as often as possible.
Using cultural influence to lobby for favorable regulation
Social media's ability to influence public opinion has to be leveraged persistently. Popular crypto influencers have to take responsibility for the content they create.
It must increasingly emphasize Bitcoin's decentralized, censorship-resistant origins. Audiences should be constantly reminded that Bitcoin is a tool for financial freedom, not profit maximization.
Strengthening values that naturally repel institutionalized control will drive people to seek more fervently the regulatory protection of Bitcoin. Policymakers can be influenced to oppose regulations that give excessive power to centralized entities. Using social media to spark discussions that uphold cultural values will affect regulatory advances.
The time is now
It’s clear that the rising influence of major institutions over Bitcoin warrants deeper reflection. While their involvement may appear to validate crypto’s growing legitimacy, we must ask at what cost we cosign this narrative.
Recent: 7 confusing crypto terms (almost) nobody understands
Short-term gains are exciting for retail
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.