Charles Hoskinson warns that the US government holding 19% of Bitcoin's supply could threaten its decentralization.
Centralization could discourage global adoption of Bitcoin, with other governments hesitant to invest.
Despite potential short-term price spikes, Hoskinson cautions about long-term risks, including compromised Bitcoin values.
Charles Hoskinson, the founder of Cardano (ADA), is sounding the alarm on a controversial proposal that could see Bitcoin becoming a US reserve asset. The idea involves the US Treasury purchasing a staggering 4 million BTC—about 19% of Bitcoin’s total supply.
Such a move could spike Bitcoin’s price and usher in favorable regulations. However, Hoskinson warns of significant risks that could overshadow these benefits.
https://twitter.com/BSCNews/status/1821904793373184421 A Centralization Threat to Bitcoin’s Core Values
Hoskinson’s primary concern revolves around the centralization of power. If the US government were to acquire nearly one-fifth of Bitcoin’s supply, it would gain enormous influence over the digital asset market.
To put this into perspective, the largest Bitcoin holder today is Binance, which controls just 1.26% of the supply—worth around $15 billion. The US holding 19% would be an unprecedented concentration of power in a market designed to be decentralized.
While the initial impact might seem positive, with Bitcoin holders likely seeing short-term gains due to the massive buying pressure, the long-term implications could be detrimental. Bitcoin’s decentralized nature, one of its most cherished features, could be severely compromised.
Global Adoption Could Take a Hit
Another critical issue Hoskinson raises is the potential impact on global adoption. If the US were to hold such a significant portion of Bitcoin, it might discourage other governments and large institutions from investing in the cryptocurrency.
The concern is that with the US exerting so much control, other nations might be hesitant to embrace Bitcoin as a global asset. This could stall the widespread adoption that many in the crypto community are striving for.
While the prospect of Bitcoin becoming a US reserve asset might initially seem appealing, Charles Hoskinson warns of hidden risks that could have far-reaching consequences. The threat of centralization and its potential to hinder global adoption are serious concerns that deserve careful consideration.
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