who controls Bitcoin according to bitcoin.org
the answer is quote “All Bitcoin users around the world including Bitcoin miners developers
and holders.” So in theory nobody controls Bitcoin nobody nobody in practice however powerful
entities including asset managers like BlackRock are trying to control Bitcoin by investing
in miners funding developers and accumulating billions of dollars worth of BTC and that’s why
today we’re going to take a look at who is trying to control Bitcoin how they’re going about it
whether they will succeed and what it could all mean for the price of Bitcoin this is a video
you can’t afford to miss in November 2023 it was discovered that F2 Pool one of the largest Bitcoin
mining pools had secretly been censoring Bitcoin transactions in practical terms this meant that
they refused to process BTC transactions going to or coming from wallets that had been sanctioned
by the US government thankfully the solution to the censorship was simple miners simply started
directing their hash rate to other Bitcoin mining pools that do not censor transactions but it
begs a question what if most of these individual Bitcoin miners started censoring BTC transactions
and not just the pools we don’t have to look very far to find the answer back in 2021 Marathon
Digital the largest publicly traded Bitcoin miner announced that it had launched a mining pool
that was compliant with sanctions imposed by the USS Office of Foreign Assets Control or OFFAC for
short it subsequently announced that 100% of its hash power was being directed to this pool now if
you’re thinking “Hey no big deal marathon Digital is just 6% of Bitcoin’s total hash rate and there
are lots of other miners.” Think again as of late last year roughly onethird of Bitcoin’s total
hash rate came from public Bitcoin miners in the US all of whom are subject to US regulations
including OFAC more importantly their share of Bitcoin’s total hash rate has been rising and
this trend is likely to continue and that’s just because public miners can do things like issue
debt and sell shares to expand their operations and capacity most private Bitcoin miners can’t do
this as easily if at all and this means that more and more of Bitcoin’s hash rate is likely to come
from publicly traded Bitcoin miners in the coming years and this is a bigger problem than you might
think because these Bitcoin miners aren’t just being coerced by the government they’re also being
influenced by asset managers black Rockck Fidelity Vanguard State Street and other large asset
managers happen to be the largest shareholders in most publicly traded Bitcoin mining companies
now for context these asset managers are infamous for using their holdings of company shares
to influence the operations of said companies the most egregious example of this was the ESG
investment ideology which mandated that public companies use more expensive forms of energy
hire people based on characteristics other than merit and put asset managers ahead of customers
basically the opposite of what companies should do fortunately public opinion and politics have
turned against these objectively harmful ideologies and practices unfortunately public
opinion and politics are something that can change very quickly in a few years time ESG could come
back with a vengeance and this would be very bad news for Bitcoin with the likes of Black Rockck
having significant influence over listed Bitcoin miners this means that they could theoretically
coers them to support a switch from proof of work to proof of stake and this switch would be
successful if most of Bitcoin’s hash rate came from these miners and if you’re thinking well that
would never happen because they would need most of Bitcoin’s developers and most BTC holders to agree
to the change think again asset managers like BlackRock are funding Bitcoin developers and their
spot ETFs are quickly accumulating a sizable chunk of BTC’s circulating supply thankfully powerful
entities in the crypto industry are hyper aware of this and are responding with counter measures
of their own but if you weren’t aware of this then if you watched our first video about Bitcoin and
ESG way back in 2021 you’ll know that we flagged the fact that ESG ratings agencies were working
hard to figure out who the most influential Bitcoin developers were uh presumably so that
they could be influenced in some way or another as a fun fact ESG obsessed asset managers like
Black Rockck never actually had a problem with Bitcoin’s alleged environmental footprint nor its
alleged use in crime and that’s because they know that most Bitcoin mining is done using renewable
energy and only a fraction of Bitcoin transactions are criminal what they did have a problem with
however was Bitcoin’s governance aka control as you’ll know Bitcoin technically has no formal
governance process and this means that Bitcoin can’t be changed very much it’s a double-edged
sword that’s good for Bitcoin but bad for Black Rockck and company that’s because Black Rockck and
other asset managers want to have the ability to influence Bitcoin just like they do with publicly
traded companies without shareholders or a formal governance structure this is difficult to do
but it’s not impossible and you’ll recall that Bitcoin miners are just part of the equation
bitcoin developers and BTC holders are the other parts and if you watched our video about
Bitcoin’s block size war you’ll know that less than a decade ago Bitcoin developers and holders
successfully prevented miners and institutional investors from increasing the block size ensuring
that Bitcoin remains decentralized the fact that these institutional investors started getting
interested in developers after the block size war suggests they learned from their mistakes
if you want to influence Bitcoin it’s not enough to influence the miners you need to influence
Bitcoin developers as well as the holders and how do you influence these parties with money of
course asset managers like Bitwise and Vanic are donating to Bitcoin developers and are using a
portion of their spot Bitcoin ETF proceeds to do it the good news is that larger asset managers
like BlackRock and Fidelity aren’t known to be doing the same the bad news is that Bitwise and
VanX decisions to fund Bitcoin development opens the door to larger asset managers doing the same
in other words they’ve arguably set a dangerous precedent that could result in other asset
managers donating millions of dollars to influence Bitcoin’s development and this is terrifying when
you combine this influence with the terms and conditions of the spot Bitcoin ETFs these asset
managers offer in case you missed the news Black Rockck’s ETF contains a clause that states Black
Rockck reserves the right to decide which Bitcoin fork the ETF supports if there’s a fork and if
you watched our recent video about the biggest risks to Bitcoin you’ll know that the threat of a
quantum computing attack means a Bitcoin fork is essentially guaranteed at some point and this
means that in the not tooistant future Black Rockck will have the power to influence which
Bitcoin is the real Bitcoin and some claim that most holders will reject this version that Black
Rockck supports if it goes against Bitcoin’s ethos but it’s evident that most Bitcoin holders care
more about profits than true financial freedom they would likely embrace the version supported
by asset managers and sell the other and this would result in the unsupported fork of Bitcoin
going the way of other forks slowly fading in value and relevancy all we can do is hope that the
Bitcoin developers that implement this apparently inevitable fork aren’t completely captured by
the interests of asset managers by the time it happens and you’ll recall that asset managers
would likely have a significant influence over Bitcoin’s hash rate via their stakes in listed
Bitcoin mining companies by that point and it’s also worth remembering that most of the freely
tradable BTC could also end up being held by ETFs due to their legal protections the good news
is that Bitcoin’s price would likely perform well because of all this coordination and as say if
you’re trading Bitcoin already then you should question and that’s whether asset managers like
BlackRock could succeed in taking control of Bitcoin in the coming years as with all great
power politics the answer ultimately depends on what the other side does in this case what
companies in the crypto industry are going to do for starters it’s important to note that not all
asset managers are in favor of the kind of global governance that BlackRock explicitly engages in
and advocates for there are many asset managers that are aligned with the crypto industry and
Bitwise and Vanic happen to be two of them and this means that their decision to use a portion of
their ETF proceeds to fund Bitcoin development is likely being done to ensure that Bitcoin stays the
way that it is right now a decentralized digital asset that can be self-custodied and can’t
be controlled and they’re not the only ones tether CEO Paulu Arduino revealed in a recent
Bitcoin documentary “The stablecoin issuer will also begin funding Bitcoin development and
could be doing so already.” And notably Arduino specified that Tether is doing this to ensure
that Bitcoin stays the way that it is so that BTC retains its value indefinitely and this is worth
noting because it’s also something we flagged in our recent video about what happens when the last
Bitcoin is mined the TLDDR is that we speculated that governments could begin mining Bitcoin to
ensure that its blockchain remains neutral and transactions are processed normally in case you
didn’t notice this is effectively what Tether is doing and not just in terms of funding Bitcoin
development at the recent Bitcoin conference in Las Vegas Arduino revealed that Tether has
quietly become the largest miner by hash rate and said they’ve deliberately been keeping
this fact lowkey in retrospect it’s not that surprising tether has been investing hundreds of
millions of dollars into Bitcoin mining in recent years including buying large stakes in listed
miners tether has also been investing billions of dollars into energy production in countries like
El Salvador as a cherry on top tether has been using a portion of its monthly profits to buy BTC
it recently revealed that it holds 100,000 BTC and uh chances are that this stack is going to keep
growing for reference Tether makes most of its money from the yield it earns on USDT’s reserves
namely US bonds according to a Bloomberg report earlier this year Tether made a staggering $13
billion in profit in 2024 not revenue profit as in the money that’s left over after all expenses were
paid to put things into perspective Black Rockck’s profits of 2024 were $6.4 billion and this means
that Tether literally made twice the amount of profit as Black Rockck the world’s largest
asset manager and this is money that Tether can use to do things like invest in Bitcoin mining
operations fund development and accumulate BTC all to ensure that Bitcoin remains true to its ethos
speaking of which it’s not just Tether that’s been accumulating BTC either companies like Strategy
have been accumulating billions of dollars worth of it too and it looks like these so-called
Bitcoin treasury companies are on the same page about BTC being truly decentralized digital money
in some then while there are powerful Tradfire entities like Black Rockck looking to influence
Bitcoin there are equally powerful crypto entities like Tether that are actively doing the same
whether this fundamentally undermines Bitcoin’s decentralization is up for debate but we reckon
it’s both ideal and inevitable it’s ideal because you have two powerful factions doing a tugofwar
and Bitcoin will probably remain in place as a result so to speak it’s also inevitable because
as the importance of the Bitcoin blockchain rises and BTC’s value increases more and more entities
will try to influence both although this tugofwar is currently limited to private entities like
Tether and Black Rockck it’s likely that nation states will start pulling on the proverbial rope
and some would say that this is starting already again this could be paradoxically good for Bitcoin
as competing interests would cancel themselves out there’s just one more elephant in the room that
we need to address though and that’s Bitmain now for those unfamiliar Bitmain is the largest
manufacturer of Bitcoin mining machines also known as ASEX according to a Bloomberg report last year
Bitmain has a whopping 90% market share of these ASEX given this fact it stands to reason that
whoever influences Bitmain could likewise exert influence over Bitcoin and this is where things
get interesting because Bitmain is a Chinese company with its headquarters still continuing
to be in Beijing despite China’s ban on Bitcoin mining and restrictions on crypto more broadly
however Bitmain’s largest investors all appear to be based in the US namely Sequoia Capital which
is based in California in turn Sequoia’s earliest investments seem to have focused on startups in
China as well as Israel and India as another fun fact Sequoia was one of the first investors
in Apple which went on to play a key role in growing China’s advanced manufacturing capacity
according to multiple reports and this makes it hard to know who influences Bitcoin is it the
Chinese government or is it Sequoia and if it’s Sequoa could Chinese interests still be involved
somehow to add to the complexity Tether being the largest Bitcoin miner likely means that it’s also
Bitmain’s largest customer not only that but Bit Deer one of the listed miners Tether invested in
was originally part of Bitmain on that note some of you might know that Bitmain tried to IPO in
the past believe it or not but this could have been bad for Bitcoin because it could have made
one of the most important companies in Bitcoin vulnerable to capture by inherently anti-crypto
asset managers like Black Rockck and Vanguard and that’s why we’re concerned about the possibility
that Bitmain could try to IPO again in the future with a crypto-friendly SEC in the US it would be
incredibly easy for them to do it for what it’s worth though companies don’t IPO unless they need
to raise capital or because early investors want to exit and it doesn’t look like Bitmain needs
more money and its monopoly probably means its investors don’t have any interest in exiting if we
do see Bitmain file for an IPO though it could be a huge red flag for Bitcoin’s future and its price
and this of course brings me to the big question and that’s what all of this means for Bitcoin the
network and BTC the asset which I’ll remind you are technically two separate things and if you’ve
been paying attention you’ll already know the answer bitcoin will remain mostly unchanged and
BTC will likely benefit and that’s because you’ll have at least two powerful factions looking
to influence Bitcoin by expanding its mining capacity improving its development and buying
more and more of it in case it wasn’t obvious enough these dynamics will be beneficial both for
Bitcoin the network and BTC the asset and I’ll reiterate that we’ll see more powerful factions
getting involved as Bitcoin and BTC continue to grow and this will only accelerate this dynamic
making Bitcoin better and better and pushing BTC’s price higher and higher however this assumes
that there’s never a decisive win in this growing tug of war if Tether or Black Rockck were ever to
experience issues that affected their ability to influence Bitcoin then the other side could win uh
for instance if one of the custodians holding the BTC back in Black Rockck’s ETF shares was to be
hacked this would result in a mass exodus out of these ETFs and this would practically result in
the pro- crypto camp winning the tugofwar as it would result in more BTC holders keeping their
SATs in self-custody on the flip side though a loss of confidence in ETFs and the like could
limit the ability of large pools of capital to allocate to BTC creating a headwind for its price
conversely if interest rates were to go back to zero then Tether’s eyepopping profits could
fall to zero as well it goes without saying that zero interest rates would be rocket fuel
for Bitcoin’s price but it could simultaneously restrict Tether’s ability to exert influence
over Bitcoin giving Black Rockck the higher ground considering this dynamic it’s incorrect
to say that Bitcoin is successful because nobody controls it on the contrary Bitcoin is successful
because powerful entities are constantly trying to control it and the tugofwar this creates
results in an equilibrium where Bitcoin becomes more robust and BTC grows so long as neither side
scores a decisive victory Bitcoin will continue to be successful but never forget that powerful
individuals and institutions hate losing if one side gets a sense that the other side is winning
then they could resort to drastic measures that damage the Bitcoin network and tank BTC’s price a
quantum computer attack would be one way to do it and you can learn all about how quantum computers
could crack Bitcoin by watching this video right over here and if you’re not subscribed to the
channel yet you can do that right over here this is Nick signing off thank you very much
for watching and I’ll see you guys again soon
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