A fair warning to you that this post is nothing more than my thought being put on digital paper.
Call me crazy if you want, but I think soon in the future crypto might turn out to be one of the biggest rug pulls of all time. This is me saying it as a once crypto fan boy.
Centralization of Bitcoin Mining#
The bitcoin network has become awfully centralized over the past few years, especially after the recent halving. I’ve seen a significant shift in the bitcoin mining market. Pre-2020, you could see hobbyists mining bitcoin with multi GPU setups or ASIC miners, but now you either have to buy cloud contracts to mine or be a whale who has a data center full of ASIC miners that are making money for you.
The bitcoin evangelists who wanted no government control and wanted bitcoin to be the next currency, an international digital currency that will give freedom to the masses, have all disappeared.
Government Involvement and Regulation#
As time goes on, there is more government involvement with bitcoin and other cryptocurrencies. The big countries have realized the potential harm that cryptocurrencies like bitcoin can have on the economy and have started to regulate it, which was a good move.
Now, bitcoin is nothing more than an asset that people keep not to use it as currency but because it’ll go up in price as time goes on. Bitcoin has lost all its meaning of being a once intended international digital currency, and it can never be one due to its fundamentally flawed design.
Risks of Increasing Centralization#
If you’ve understood till here, you’d understand that as it gets more centralized with time, the chances of the network being controlled by a few big individuals increases astronomically.
As of writing this, 25 public companies hold 39.5% of the hash rate of global mining. While there are many private companies that are huge, as they are private we can’t know for sure how much mining capacity they have, or if there are a few companies that are already collaborating together. How will anyone know of it?
This is where I have doubts with bitcoin. If you have control over more than 50% of the network, you can change the records and the rest of the miners. The minority might find out too late that the whole blockchain has been compromised. Although the chances of this happening are low, but never 0.
Geopolitical Factors#
This is something that the U.S.A has started to move towards after Donald Trump took office. He has shown more interest in bitcoin and crypto in general because he knows he can play in the grey areas to manipulate markets and keep the U.S.A afloat even when internally the economy is hollow.
But the U.S.A is playing catch up. They realized this game too late, and even if they had realized it, they didn’t have the money to invest in this plan. A.I bringing money and giving some boost to their economy has freed their hand a little.
The reason why they are investing in crypto mining operations in Pakistan and not in their own country is because it’s cheaper to build a brand new electricity grid and power plants in Pakistan than to build it in their own country.
Plus, Pakistan is a corrupt country. They are easy to control.
The other big player is China. They don’t have a problem with electricity. They have surplus, which they are investing wisely into mining operations while also chasing the U.S.A in the A.I race.
When you look at geopolitics from this perspective, it is certainly entertaining to watch.
Control, Development, and the Broader Crypto Industry#
When a majority collaboration reaches a successful consensus, be sure that they will manipulate bitcoin.
Bitcoin’s core dev team is also not that big, not that hard to find or manipulate. The whole crypto industry is standing on the shoulders of one, which is bitcoin. When bitcoin gets compromised, the whole industry vanishes overnight.
There are more subtle things going on which are beyond the scope of this post, like the U.S.A moving towards crypto so that they can dump their 34-something trillion debt.
They will most likely introduce a centralized cryptocurrency and market it like crazy. Influencing people of other nations to invest in it. Donald Trump has already done this in the past by introducing his own meme coin and rug pulling at least $1 billion.
Heck even Elon Musk has boosted Dogecoin for fun and made a few hundred million. Anyone with influence can move the crypto market because they can. One tweet and the markets rise and fall.
It’s safe to say that crypto has become an asset and nothing money than that. And a volatile asset at that
