I don't think the mass loss of private keys is the main threat to Bitcoin. 🙋
In my opinion, the main threat to Bitcoin is the actions of institutional players. Almost all large institutional players store Bitcoin centrally (in cold storage, Coinbase). This leads to a decrease in the number of transactions on the Bitcoin network. This also reduces the fees received by miners, and therefore their income. Meanwhile, it is miners who ensure the security of the Bitcoin network.
We are facing a situation where people are no longer buying Bitcoin, but trading derivatives. Even on our forum, people are writing (I've read such stories) that they no longer buy Bitcoin, but bet on its future price on the Polymarket prediction platform. This is the main danger! Bitcoin will become worthless, and its former decentralization will become a beautiful legend from the past. Meanwhile, a centralized Bitcoin has no underlying value. Even institutional investors (who, I believe, many forum participants are pinning their hopes on to save Bitcoin) don't need such a toy. The financial interests of all institutional players are focused on the traditional fiat financial system. 🤷
I understand your concerns, but I do not agree with one thing. The fact that institutional investors hold more Bitcoin and individuals tend to deal with these institutions more does not automatically make Bitcoin itself centralized. You said decentralization will become a legend from the past. How possible is it that
EVERYONE will choose centralized platforms and ignore decentralization, even when Bitcoin's model remains decentralized and they could still directly invest in Bitcoin?
Well, the worry that in the next generation, people may not treat self-custody as important is still a valid concern. That is why we must seize every opportunity now to encourage Bitcoiners to practice self-custody. The knowledge passed on now and always will be very useful to the next set of people who adopt Bitcoin.
Bitcoin will still be decentralized and valuable in the future; it's just that we may have two major sets of investors: centralized investors and decentralized investors.
Bitcoin decentralization consists of three elements: decentralization of storage, decentralization of mining, and decentralization of development. 🙋
If we allow storage to become centralized, this will inevitably lead to centralization of mining and centralization of development. What are institutional players doing now? They're buying up actual Bitcoin and selling derivatives to retail investors instead. This trend will lead to complete centralization of Bitcoin.
The price of Bitcoin will not rise for many years because institutional players will create an excess supply in the form of derivatives (stocks, futures, options, etc.). People will buy derivatives instead of Bitcoin, so the price of Bitcoin will not rise.
This will lead to mass miner bankruptcy. Mining will be centralized. Then development will be centralized. People are very easily intimidated and bribed. 🤷
Bitcoin is a potential power. But this power is real for ordinary people. Satoshi Nakamoto, like Prometheus, gave humanity fire (Bitcoin). The Olympian gods appropriated it. The Olympian gods don't need fire. They have lightning. 💥
Institutional players can't harness Bitcoin's power because they don't need decentralization. For them, Bitcoin is simply a way to earn fiat money. A temporary toy.
