X mail By Anita Bush Warning about the risks of governments and institutions purchasing large amounts of Bitcoin spread this week — if only because Trulish Community Memo that appeared underneath. I think the main concern here is that these large holders could influence Bitcoin’s consensus rules to impose censorship.
When it comes to censorship specifically, mining centralization actually represents a more direct threat. But if it’s just a matter of censoring miners, that will only last as long as the majority of miners are willing to keep doing so – at the expense of forfeiting transaction fees. If the oversight stops, confirmation of transactions will start again as if nothing had happened.
However, if economic nodes were to enforce censorship as new protocol rules as well, it could already be considered a soft fork. In this scenario, miners cannot return from censorship without splitting the blockchain between “updated” (overseen) nodes and non-updated nodes; It would form a hard fork. Buyers and sellers of the two versions of Bitcoin will then determine which blockchain is more valuable; That’s why some Bitcoin users are concerned about governments and other large institutions accumulating a large share of the Bitcoin supply.
It’s a reasonable concern, and something we should be aware of. At the same time (and similar to my argument in this article), it is not clear to me that governments or large institutions would be willing to risk everything by betting on a Bitcoin censorship fork. But more importantly, there’s not much we can do to prevent governments or other institutions from buying Bitcoin anyway — nor should there be much, because that would (ironically) itself constitute a form of censorship.
The best countermeasure, in this regard, has already been suggested by Nicholas: MicroStrategy does not sell your bitcoin.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
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