Explained by Cyber Capital CIO

Bitcoin (BTC), the largest cryptocurrency, has never had a CEO or a formal governance firm that oversees its development. At the same time, it is still vulnerable to centralization and “conflicts of interests,” seasoned cryptocurrency researcher says.

Bitcoin (BTC) became centralized without formal governance

Despite lacking formal governance institutions and managers, Bitcoin (BTC) became “extremely centralized” over the past years, claims Justin Bons, CIO of Cyber Capital. Bitcoin Core members are those who have too much influence on decision-making in Bitcoin (BTC) development.

BTC might not have an active founder, but it certainly does have a team, ironically known as Bitcoin Core

Who, over the years, have captured BTC

As they can effectively gatekeep any rule changes

This is how BTC, without formalized governance, has become extremely centralized!

— Justin Bons (@Justin_Bons) April 8, 2023

Bitcoin Core achieved this “unhealthy” level of influence by effectively gatekeeping all rule changes they oppose. In particular, they managed to “crush” a number of use cases associated with fungible and non-fungible tokens (NFTs).

Blockstream and Chaincode Labs are the two companies that benefit the most from the current status quo. They control the majority of developers contributing to Bitcoin Core, Bons added.

Moreover, they might be using their influence to suppress the progress of Bitcoin (BTC) as L1 to accelerate the adoption and promotion of their proprietary developments:

Blockstream & Chaincode Labs are the two biggest companies behind Core. The crazy thing is that these companies are developing for-profit L2 solutions, which gives them a clear conflict of interest when it comes to scaling the L1

As covered by U.Today previously, Justin Bons highlighted that Bitcoin (BTC) security might be on borrowed time as its “budget model” is doomed to collapse in 5-9 years.

Is Bitcoin (BTC) progress really “whale-dominated”?

The process of Bitcoin (BTC) development is coordinated by Bitcoin Core, an independent team that maintains and releases eponymous Bitcoin (BTC) client software. While it is not able to collaborate with any for-profits directly, some firms might “sponsor” this or that Bitcoin (BTC) developer with a one-year grant.

In February 2023, Wall Street Journal released an alarmist longread about painful processes in Bitcoin Core. At least three developers resigned following the stepping down of Wladimir van der Laan, its long-running lead maintainer.

In total, over 300 developers are active in Bitcoin GitHub repositories. However, while veteran developers are leaving their roles one after another, it becomes easier to control those who remain in charge of the Bitcoin (BTC) codebase.