Without reforms, Bitcoin’s economic model may collapse, leading to a price crash as institutional players exit early.
Bitcoin (BTC) is under fire as critics argue that its fundamental principles have been abandoned. According to Justin Bons, a crypto researcher and investor, BTC has lost its cypherpunk ideals. He claims that governance is controlled by a small group, blocking scalability improvements and threatening Bitcoin’s long-term viability.
Bitcoin’s governance has become centralized, Bons asserts. Initially, Bitcoin aimed to provide decentralization, financial sovereignty, and censorship resistance. However, Bons argues that the Bitcoin Core team has shifted its purpose. By limiting scalability, BTC can only handle around seven transactions per second. Consequently, transaction fees spike whenever network activity rises.
Moreover, Bons highlights that BTC’s security model is in jeopardy. Initially, Bitcoin relied on transaction fees and block rewards for network security. However, since Bitcoin Core prevents transaction volume growth, long-term security funding remains uncertain. Hence, in 8 to 12 years, BTC may require an increase beyond the 21 million supply cap to survive.
Bitcoin’s current trajectory forces users toward centralized custodians. Since transaction fees are high and scalability is lacking, users opt for off-chain solutions. However, this contradicts Bitcoin’s original vision of decentralization.
Additionally, the lack of scalability could trigger a “bank run” scenario. If holders attempt to exit in large numbers, network congestion would make transactions slow and expensive. Consequently, liquidity could be trapped, further shaking investor confidence.
Bons predicts BTC’s collapse within the next decade due to its flawed economic model. He states that Bitcoin Core’s decision to rely on high fees rather than mass adoption is unrealistic. If no changes occur, BTC may fail to maintain network security, forcing controversial inflation adjustments.
Moreover, as institutional players recognize these risks, a social collapse may occur before the technical downfall. Large stakeholders may exit early, leading to a price crash. Consequently, retail investors could suffer significant losses.
Despite his criticisms, Bons remains a strong advocate of cryptocurrency. He calls on the community to embrace Bitcoin’s “children” – alternative projects that follow the principles of decentralization and scalability. He argues that these successors will be required to realize Satoshi Nakamoto’s vision. There remain uncertainties about the future of Bitcoin. However, Bons says that BTC’s supremacy will be challenged in the near future if some critical changes are delayed
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