What happens to BTC price if it becomes centralized?

Let’s do a little thought experiment. Picture this: the core Bitcoin code gets revamped to achieve two major things. First, it allows Bitcoin to handle every single daily transaction globally without breaking a sweat, with almost no fees and instant clearing times. Basically, it could replace every financial transaction out there, even the tiniest ones, beating credit cards on cost and speed. Second, it would mostly kill the whole idea of decentralization because this new setup would be governed by one entity or a tightly-knit group of entities managing the nodes closely, ditching PoW and all that jazz. So, how do you think the market would react to this news? Here are my thoughts: Some might freak out and say, "OMG they're destroying what Bitcoin was all about! I'm cashing out all my sats!" Others might see it differently, thinking, "This is amazing! BTC is gonna skyrocket now that it can be used everywhere, I’m buying up all the sats I can!" Then there's the faux negative crowd, who'd scream about how terrible it is, but secretly stock up on BTC because they know it’s gonna pump. I’ve noticed a trend in posts around here lately: it’s like the original Bitcoin spirit is fading, and now it’s all about driving the price up. Nowadays, it seems most Bitcoin users are operating in a centralized manner anyway.

There's a condition to your question which is if, this is a probability in which they cannot be certainty to, if I am to give you an answer directly to what I see, then know that bitcoin can never turned a zero value, as long as the protocol and everything remain in consensus, also we should not think of seeing it being centralized because it is already made by default in the centralized digital currency.

If bitcoin was to be centralized, many people won't invest in it because it will still be same issues with centralized crypto projects. It will face a lot of manipulation by the government and they can trap people by pumping the price and after many people has invested they can dump the market and many people will suffer severe losses and the price won't rise again. The reason why bitcoin exist till now is because of its decentralized nature. Forget about ETH, XRP and SOL because even though that some of those cryptocurrency has a strong network but they are likely to disappear in the future. I don't know what you meant by saying that most bitcoin investors use centralized means but you should know that as much as many people are trading bitcoin on CEX, there are also many investors who are strong hodlers and they still have their bitcoins in self-custody wallets. Never think that bitcoin will reach the moon if it becomes centralized because even the government do not want you to be rich so they will never allow the price to reach zenith.

As a thought, potential investors could see holding Bitcoin as a waste of time because the digital gold value has become more like a centralized database like the digital dollar or even the CBDC. This would make assets easily seized or blacklisted and could even make Bitcoin lose current adopters who already believe in the decentralized nature of Bitcoin and own investments in it. The market has always leaned towards the slower more decentralized version of money because of the accumulated value it holds as immutable, rather than what the centralized version which holds cheap transactions value holds for them. There was a similar case of this instance during the block size war in 2017 when Bitcoin vs Bitcoin cash competed for dominance.

Most other cryptos are much more centralized than Bitcoin and collectively they have about 45% of the market cap of Bitcoin. That proves that most investors don't care about centralization imho. Again, this hasn't happened with those other cryptos, so why should it happen to Bitcoin? And since most BTC investors already use a broker or an app or an ETF, this theoretical issue is already come to pass and the market doesn't seem to care. They have hundreds of billions in market cap, hundreds of millions of users, and are growing every day. Are you sure they are just going to disappear one day? Why? Why would that make any difference. Bitcoin would still be Bitcoin, limited to 21M blocks, etc., it would just work differently behind the scenes. Again, if you use a broker or an app like most investors of BTC do, or especially the ETF, then that same risk applies--and nobody seems to care... Something can be immutable and also be centralized and fast. You don't need PoW to be immutable.

Try signet, and see, how much it is worth: https://altquick.com/exchange/market/BitcoinSignet Also, if you wonder, how Bitcoin would behave, if this or that would be changed, then there are a lot of altcoins, which can show you exactly that. If nothing else would matter, then Bitcoin wouldn't be created in the first place. It was born just after 2008 crisis, and you can literally see in the first input ever created, why it was made. In general: if fiats would be better, then Bitcoin would never be needed. And as long as centralized currencies are stable for a long time, and then they crash hard, by making a lot of people poor, Bitcoin will be needed. There is one problem with that way of thinking: similar solutions are known for years. There is nothing new, if you want to make yet another centralized mint: https://en.bitcoin.it/wiki/Bitcoin_is_not_ruled_by_miners#Efficiency And when it comes to other altcoins, how do you know, that some "chancellor" would never do a "second bailout for banks", but this time on these altcoins? If you wonder, why so many people are using altcoins, just to get more BTCs, then now you should know the answer. Many altcoins are doing well, mainly because a lot of people use them as a way to get BTCs, or they wrap their BTCs into them, use them, and then earn BTCs from them. If not that, then they could be worth much less, because similar solutions existed long before Bitcoin, and you can see, how they ended, when they were not connected with any BTCs, to get some value from there.

A good perspective I have thought about this when I reasoned how most are more concerned about price than Bitcoin. Well it would turn bitcoin to other altcoins Expect pump and dump manipulation (worse than this). Bitcoin would crash And the price would be lower than you think. It may seem like people don't care about decentralisation But subconsciously they trust if and believe it's would moon because of that and supply.

I feel that the decentralization of bitcoin takes more effects in the security of the network and not in volatility. Bitcoin can be centralized and still the price will go positive or negative. That being said, bitcoin volatility is determined by the demand and supply factor and then sealed by the scarcity model. So, there will still be movement of bitcoin price even if it's centralized. The problem and the doubt will come in a a critical point - ensuring that 21 million BTC cap supply is not altered behind the scene. This is the point that the decentralization is influencing the price.

I agree I think that if we are even taking about bitcoin price and volatility the case for decentralization shouldn’t be brought up. This is because decentralization is a network thing and not actually tied to price. Bitcoin price is dependent on the market demand or supply and not about how the network of bitcoin is. Decentralization should only come into discussion when the discussion is about nodes. As for how the price will fair if the coin is actually centralized I think bitcoin will lose investors for sure, because some investors are after bitcoin not just of some of the other values it is adds like store of value but because it’s not controlled by any singular entity. So let’s say bitcoin is centralized today then I will say that the price will fall

Non-bitcoin cryptos, mostly concentrated among about four more coins, are about 45% of the total crypto market cap. They are smaller than Bitcoin, but that certainly shows that non-decentralized is not a deal breaker for investors. Digital currencies were illegal in 2008. They are legal today. Bitcoin needed to be created the way it was back then. Now this architecture is not necessary. There are many, many examples of products that were designed a certain way, then the situation changed (and they didn't), and then they went obsolete. If investors don't care about decentralization, then Bitcoin should pay attention to that. Things like the ETFs are hard to ignore. Why would the backend architecture make any difference? Bitcoin is pumped/dumped all of the time by whales anyhow. Anything that is openly available on the market can be pumped/dumped. Exactly. The important promise is the 21M cap, not how the physical network works. And the 21M cap absolutely is centralized since it's basically up to a few dozen caretakers of the Bitcoin code base. To the average investor, the only thing they would notice is that transactions are much faster and extremely cheap all of the sudden, leading them to believe that Bitcoin adoption could multiply. Everything else about Bitcoin would be exactly the same.

Yep, you are right. A lot of people are using it in a centralized way by buying and selling on centralized platforms and giving their information like KYC, so that affects the real benefit of BTC. But if it becomes centralized, I am sure the negative impact would be bigger than the positive impact. That means a lot of people will start selling. Although stablecoins are what you are talking about, they have low fees and can be used for the tiniest transactions. Their fees are lower, but a fee is still a fee, and there are only a few conditions where we do not have to pay fees, like using specific platforms. The point is, if I care about decentralization, which I do, I will sell. But I have BTC, and I care about my profit because I have dedicated some years to it, learning and accumulating, so I do not want to miss any chance if it goes to the moon. So I will sell more than 80% to save myself from a huge loss because I am 100% sure it is going to hit $4k or maybe lower if it becomes centralized. And yes, I will buy again if it ever hits $4k.

Well, there are stablecoins out there with ZERO transaction fees and transactions in milliseconds. Certainly a lot of people feel this way, as I mentioned in my OP. But the question is whether people with your feelings have more money than the rest. I bet most of the $$$ would stay in BTC, and lots of new money would come in, but that's just a guess. The "big" money that truly moves the market, as well as the BTC whales, wouldn't move away. For instance, would Michael Saylor dump all of his BTC if Bitcoin became more centralized? I seriously doubt it.

Hello I said worse not that it doesn't already exist The only time that it may seem to be bullish is if it becomes a legal tender And once it is volatility would be killed Because it would be harder to control a volatile currency. And not to forget nothing stops them in making it like a cash printer.

Decentralization is one of Bitcoin's key features. Losing this wouldn't be a good thing. In that case, whoever controls the network gets their way. They can manipulate the price however they want. Why would we want to be part of a centralized system anyway? We already have fiat currencies for that. At that point, Bitcoin would lose its purpose. It would be no different than Ripple and similar altcoins.

The slowness of transactions is what gives Bitcoin its security and prevents many problems, so we shouldn't worry about making transactions faster on the main chain. It's not a bug; it's a fundamental feature. It's like gold: if we wanted to pay millions in gold, we would need time to transport it, and that has never been an impediment to its value. Making transactions instantaneous would mean collapsing the mining process with so many blocks per second, which would cause it to fail on its own, regardless of whether it's centralized or not. There are also sidechains for speed, and we can always return to Layer 1 if they become too centralized.

If Bitcoin's creator Satoshi Nakamoto is identified or if he goes public, Bitcoin will become a central currency, then perhaps the Bitcoin we hope for in the future may not be possible in reality. But if Bitcoin's creator Satoshi Nakamoto is not identified or if he does not go public, Bitcoin will never become a central currency. If Bitcoin does not become a central currency, Bitcoin will not reach zero value in the future. That is, Bitcoin will continue to increase over time if the original inventor of Bitcoin does not come forward.

Yes, the miners in this case would be screwed since they would no longer get all of those fees, but that's an advantage for end-users, investors and basically everybody who doesn't work for a miner. So maybe all of the people who work for miners will dump their BTC in protest (or maybe they won't since they'll want to be around for BTC to moon), but millions more might buy BTC when it's faster and easier to get and will now have the ability to take over all human value transactions. As for the technical issues, there are... solutions to this. (I'll volunteer to help the core team if they want to do it ).

If Bitcoin was centralized, its price would be much lower than it is now but if looking at many altcoins that still have good prices like Ethereum, Solana, BNB and more top coins that are all (mostly) centralized, except little altcoins like Monero, we can see that even centralization of a blockchain does not result in very low price. Price comes after value and if a blockchain has its value that comes from its technology, use cases, utilities and adoption in the community, that blockchain and its native currency will have somewhat good value, then price will be good enough. Will Bitcoin blockchain become centralized in the future? I don't think so, and I believe that Bitcoin blockchain will maintain its decentralization, censorship-resistance very well.

The worst possibility is that Bitcoin value will drop significantly in the long term, although there may be a price surge due to faster institutional adoption, but it will only be temporary because Centralization goes against the main fundamentals of Bitcoin, namely decentralization and immunity to censorship. Centralization will leave an extreme impact on the value of Bitcoin in the long term (the potential Bearish cannot be contained) because it has lost its status as a Safe Haven and is also often considered as digital gold, this status is attached to Bitcoin because there is no government or entity that controls it. Bitcoin will lose its main advantage if it is centralized, causing investors to lose confidence and, in the worst case, mass selling of their assets due to the increasing risk of price manipulation and the government or those controlling it being able to impose strict regulations. Centralization is like a thorn in the flesh or a direct threat to the fundamental value of Bitcoin, although it may bring pseudo-stability due to institutional adoption in the short term, but fundamentally the change from decentralization to Centralization will decrease the value of Bitcoin because it removes its nature as an uncensorable currency.

Several factors make the Bitcoin price go high. Adoption is one of them, but we shouldn't overlook the halving and the bull run. Massive adoption might not necessarily lead to an increase in the value of Bitcoin; rather, it might make it a common currency. The reason why we see a massive rise is that Bitcoin is widely used as an asset. I have not seen currency like the dollars going to the moon because of massive adoption. A centralised Bitcoin system might destroy the four-year cycle, which might end the halving and bull run. Many people or institutions are interested in Bitcoin because no single individual or group of people controls the network. You are right that the market can be manipulated. But centralising the system would make manipulation easier.