Bitcoin faces a growing decentralization crisis, primarily due to the concentration of mining power and the influence of institutional actors.
1. Centralization in mining – A handful of mining pools control the majority of the hashrate, increasing the risk of censorship or malicious coordination. This has been exacerbated by the arrival of more expensive ASICs and the consolidation of operations in regions with cheap energy.
2. Institutional influence – Large companies and funds like BlackRock have entered the ecosystem with BTC ETFs, which, while promoting adoption, could also bring attempts at control or regulatory pressures that limit its use as a sovereign tool.
3. Rising validation costs – Running a full node remains accessible, but with the growth of transactions (especially with Ordinals and Inscriptions), the data burden and operational costs could deter individual users from participating in the network.
4. L2 and custody of BTC – Solutions like Lightning Network or emerging Bitcoin Layer 2 may address scalability, but many rely on centralized infrastructures, which could undermine the original ethos of BTC as truly decentralized money.
Despite these challenges, Bitcoin remains the most resilient and secure network. The cypherpunk community and developers are working on solutions such as more distributed mining, improvements in non-custodial L2, and protocols that reinforce self-sovereignty.
