Crypto industry is no longer based on Bitcoin’s original principles.

Commentary by Dr. K. co-founder Quai Network

Blockchain has lost direction since Bitcoin’s inception. We are now facing the danger of a government-controlled currency. overreach As well as blockchain solutions which prioritize performance and scalability over decentralization. 

While the growth of Ethereum, Solana and other blockchains has been impressive, these networks sacrifice core values to achieve usability or institutional acceptance. Satoshi’s mission can only be achieved by returning to the original Bitcoin ethos, which was based on a neutral and immutable currency that could not be manipulated.

Immutability, the King of all things

The fixed supply is 21,000,000 coins. halving eventsBitcoin has a certainty about its value. Bitcoin supply cannot be changed by a central authority. Bitcoin becomes a very predictable currency against the background of massive inflation and printing of money. Bitcoin rules are also extremely hard to alter, which helps build long-term confidence in the system.

Flexible performance and flexibility, at what price?

The key layer-1 (L1) participants such as Ethereum, Solana and others offer unparalleled flexibility but come with a trade-off. Ethereum’s governance-led updates Whoever holds ETH may not be happy with the changes that impact gas prices and staking incentives. Solana places speed and performance over everything else. This makes it more vulnerable to increasing levels of centralization. Due to trade-offs made, L1 network like Ethereum or Solana is severely weaken in the face censorship, manipulation and government, regulatory, and powerful corporate interest.

By March 2024 Coinbase This concentration poses centralization issues, as a handful of large players, like Coinbase, could threaten Ethereum’s decentralization and trigger a chain reaction. It is possible that a few large players such as Coinbase will threaten Ethereum’s decentralization. regulatory risks. Additionally, it takes control away from the individual and places it back into the hands of a large, centralized corporation — the complete opposite of the original vision for cryptocurrency.

What is the role of Venture Capital in Crypto?

In the beginning, crypto was a rebellious act against Big Tech. Silicon Valley had imposed a system whereby only accredited investors and startups could be backed and gain early stage gains. Crypto changed the paradigm. First time in history, the public, and not just VCs and insiders could be involved from day one with creating new technology. Now that the crypto industry is mature and has been around for some time, venture capitalists have re-established themselves, distributing cryptocurrency in ways that appeal directly to those systems they were trying to disrupt.

Recent: Metaplanet’s Bitcoin ‘premium’ nears $600K per BTC

Venture capital accelerates innovation but also centralizes the control of product development through board seats, token distributions and product roadmaps. Solana has received a lot of funding from companies such as Polychain Capital and a16z. The investment fueled rapid growth, but it also led to a centralization in tokens and power among investors.

The most prominent crypto projects, like Ethereum and Solana — whether cynical of the old system or not — are ultimately built to serve institutions in their current state. Founding teams lock-up large premines, offer highly favourable terms to early investors and design incentives towards exits in the future rather than decentralization over time. This behavior reintroduces many of the power dynamics Bitcoin was designed to remove.

Decentralization cannot be optional

The essence of individual economic freedom and censorship-resistance is decentralization. Bitcoin is protected from being hijacked because of its resistance to change. Decentralized networks that view decentralization as an exchange risk being controlled by a gatekeeper class. Decentralization is the most important factor in preserving the crypto promise.

Bitcoin’s power lies in its neutrality. It is not about its programability or speed.

In order to prevent repeating mistakes made by the conventional financial system, it is important that the crypto ecosystem returns to these core values. Instead of focusing on trends and institutional approval, industry leaders must focus again on creating instruments that will ensure absolute financial freedom. The only way to free currency from state control and take back money is to return to Bitcoin’s original vision.

A view by Dr. K., founder of Quai Network

The article does not provide legal advice or investment recommendations and it is intended only for informational purposes. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.