Nothing is truly decentralized. Bitcoin would be decentralized on Earth if all the power and internet to run the network came from another planet or moon or numerous moons and planets and was broadcasted to Earth via satellites that are not controlled by Earth and that can defend themselves successfully against an attack. The planet(s) where Bitcoin is secured needs to be able to defend the power stations from interplanetary missile attacks / nukes.
But here on Earth it aims to be decentralized but it still has centralized attributes. Look at this chart. A handful of pools dominate the Bitcoin hash rate. If the three largest pools combined their hash rate they could make a 51% attack on Bitcoin.
https://fortune.com/2021/10/26/bitcoin-mining-capacity-ownership-concentration-top-investors-nber-study/
Just 0.1% of Bitcoin miners control half of all mining capacity, according to a new study
Bitcoin’s surging popularity hasn’t changed one of its original attributes. Its ownership is still concentrated in just a few hands.
The top 10,000 individual investors in Bitcoin control about one-third of the cryptocurrency in circulation, according to a study by the National Bureau of Economic Research.
Crypto enthusiasts have long pondered who the largest owners of Bitcoin are since the early days of the its existence. It can be especially difficult to determine the concentration of ownership, as many of the largest addresses don’t often represent individuals, but exchanges and other entities that hold Bitcoin on behalf of other investors.
However, by using a data collection method that differentiated between addresses belonging to intermediaries and individuals, NBER researchers were able to find the former controlled about 5.5 million Bitcoin at the end of last year while the latter controlled about 8.5 million. Additionally, the top 1,000 individual investors controlled about 3 million, and the concentration could be even greater.
“This measurement of concentration most likely is an understatement since we cannot rule out that some of the largest addresses are controlled by the same entity,” researchers Igor Makarov and Antoinette Schoar wrote.
For instance, the data did not not assign the ownership of early Bitcoins held in about 20,000 addresses to one person (Satoshi Nakamoto) and considered them as belonging to 20,000 different individuals.
The concentration of miners is even more profound, data show. NBER found that the top 10% of miners control 90% of the Bitcoin mining capacity, and just 0.1% (about 50 miners) control 50% of mining capacity.
Such a high concentration could make the Bitcoin network vulnerable to a 51% attack, where a colluding set of miners or one miner is able to take control of a majority of the network. NBER found the concentration also decreases following sharp increases in the Bitcoin price, meaning the probability the network is vulnerable to a 51% attack is higher when Bitcoin’s price drops sharply.
“Our results suggest that despite the significant attention that Bitcoin has received over the last few years, the Bitcoin ecosystem is still dominated by large and concentrated players, be it large miners, Bitcoin holders or exchanges,” the researchers wrote. “This inherent concentration makes Bitcoin susceptible to systemic risk and also implies that the majority of the gains from further adoption are likely to fall disproportionately to a small set of participants.”
In every financial system there's always going to be a wealth disparity, Btc is no different. The difference is the top holders of btc, no matter how much they hold have no rights of the consensus protocol. No amount of btc they have can change the code. Sure they can dump the market and they have over and over, only to buy up cheap coins off people who know no better. Have a look at the last week, top 100 wallets have accumulated 80k in btc.
Elon musk has a large following, richest* man in the world, multiple companies which he resides over and makes policies and structural changes foreign and domestic in his companies favour with power and money he has. Elon purchased 1.7billion in btc making him one of the largest holders, he has no say in how btc operates. Btc doesn't give a fuck about his stack and keeps pumping blocks every 10min.
Decentralisation is not a spectrum. Centralisation means it has a centre, you can go in and shut it down. Two very good examples, opensea and metamask blocking Russia users, completely banned. These 1000s of shitcoins are masking themselves as decentralised but really they are unregistered securities. SEC will come for them.
As for mining pools, I touched on that. They would bleed their money dry before it ever eventuated. Look at china, at one point they were burning 100TW hrs per year, half the network. China shut down the network due to environmental bs issues. Mind you they burn 25000TW hrs per year. China is a major authoritarian country, they hate btc. If they could of hacked it, they would've, if they could've turned it off they would've. They're not a fan of people having private property outside of their ability to control/disrupt.
Instead what you saw was 50-60% network turned off and relocated. Because the network was so robust it had no downtime, no lawsuits, no protests. It just kept hitting ever 10minutes. Never before have you seen a network lose 50-60% of its infrastructure and have no downtime or hiccups. The hash rate fell to 60s and then grew to up over 240s. So it grew 4times larger and stronger from when it turned off. It was a trillion $$ mistake by China
