Introduction: The Broken Promise of Crypto

When Bitcoin was born in 2009, it carried a revolutionary vision: to free itself from banks, governments, and financial intermediaries. A purely decentralized currency, where each individual would be in control of their finances.

But 15 years later, the crypto market has changed dramatically. Large institutions are accumulating cryptocurrencies, regulators are increasingly interested in the sector, and even the most advanced blockchains are showing signs of centralization.

📢 “It’s not the code that decides the future of blockchains, but those who control them.” – Anonymous

➡️ Are we really freer with crypto today? Or are we witnessing a system hijacking by influential actors?

In this article, we will explore three paradoxes that show that crypto is sometimes much less decentralized than we think.


1. Bitcoin: A deceptive decentralization?

Bitcoin is often touted as the most decentralized currency in the crypto market. However, a little digging reveals that certain actors wield considerable power over the network.

Mining is dominated by a few giants

The Bitcoin network is based on Proof-of-Work (PoW), where miners validate transactions. But today:

✅ About 50% of Bitcoin hashrate is controlled by 4 or 5 large mining pools.

✅ The largest miners are concentrated in the United States and China, countries where regulation can influence their activities.

💡 If these major players were to coordinate, they could potentially influence block validation or even censor certain transactions.

Institutions are accumulating Bitcoin

Bitcoin was supposed to be a tool for financial emancipation… but today:

✅ BlackRock, Fidelity, and other financial giants are massively accumulating BTC through ETFs.

✅ More and more Bitcoin is held by companies, reducing the supply available on the open market.

🔎 As of January 2024, the top 10 institutional entities held approximately 1.2 million BTC, or more than 5% of the total Bitcoin supply.

💡 The majority of Bitcoin is held by institutions, can we still talk about an asset “outside the system”?

2. Ethereum and other blockchains: Decentralized on the front?

Ethereum and other blockchains like Solana, Cardano, and other Layer-1 networks promote their decentralized model. However, a little digging reveals that some networks remain heavily influenced by a few major players.

The concentration of validators and staking

Blockchains operate using validators or stakers that secure transactions. But on several major blockchains:

✅ Ethereum: Around 65% of staking is currently distributed among a few large platforms, which raises the question of the distribution of validation power.

✅ Solana: The network has experienced several outages due to over-reliance on a small number of validators, raising questions about its resilience.

✅ Other blockchains: Some Layer-1 networks still rely on a small number of core validators, which can impact network governance and security.

💡 What matters is not only blockchain technology, but also the actual distribution of power among participants.

Decentralized finance (DeFi) under pressure

DeFi (Decentralized Finance) was designed to offer an alternative to banks and financial intermediaries. However, as the crypto industry evolves, it must adapt to a rapidly changing regulatory framework.

Growing compliance on some DeFi platforms

✅ Some DeFi applications have implemented restrictions to meet regulatory requirements.

✅ DeFi protocols now filter certain transactions based on legal risks.

✅ Privacy-focused projects have faced restrictive measures, showing a delicate balance between anonymity and transparency.

💡 DeFi is evolving between two visions: preserving its independence while adapting to institutional adoption and new regulations.


3. Stablecoins: A bridge to traditional finance?

Stablecoins have transformed crypto by offering stability and accessibility. But their management is far from being as decentralized as one might think.

Who controls stablecoins?

The most widely used stablecoins are USDT (Tether) and USDC (Circle). But:

✅ Tether and Circle can freeze funds at the request of regulators.

✅ Stablecoins are often issued by private companies, which means they are centralized by nature.

💡 Can we really talk about financial freedom if a stablecoin can be blocked at any time?

The Evolution of Stablecoins on Centralized Platforms

✅ Some crypto platforms have adjusted their stablecoin offerings to adapt to market developments and regulatory requirements.

✅ This development shows a transition towards greater global adoption, but it also questions the role of stablecoins in traditional finance.

💡 Are stablecoins a transition tool to crypto finance or a form of centralized digital currency?


Conclusion: Are we still free?

Crypto has changed the world of finance, but its initial dream of total decentralization is now being challenged.

✔️ It gives individuals new tools to manage their finances without intermediaries.

✔️ It promotes innovation and financial inclusion.

✔️ It is attracting more and more institutional investors, which strengthens its credibility.

More…

❌ The big players in the market are accumulating more and more power.

❌ Blockchains become dependent on a few key validators.

❌ DeFi and stablecoins are moving towards a more regulated model.

➡️ Can we still talk about true decentralization, or has it become a compromise between freedom and regulation?

📣 Is crypto still a tool for financial empowerment, or is it being co-opted by the traditional system?