- Gary Gensler points out that Bitcoin is not as decentralized as believed, highlighting the influence of large exchanges.
- Bitcoin, preferred for ransomware according to Gensler, raises debates about its legitimate use versus global illicit activities.
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), recently expressed his views on Bitcoin, indicating that this Bbitcoin is not as decentralized as many assume and has highlighted its role in illicit activities, especially regarding ransomware.
Gensler argues that centralization in the financial sector has been a constant throughout history, and Bitcoin does not escape this reality. Despite being traded on a wide range of global crypto exchange platforms, the SEC chairman points to the dominance of a few exchanges that concentrate much of the market.
SEC Gary Gensler says bitcoin blockchain is just an Oracle database 😳 Is he dumb, or just playing dumb? Bitcoin's entire solution to the double spending / Byzantine general problem is based on the difference between BTC PoW blockchain versus normal databases. pic.twitter.com/hb6NedGtjJ
— PlanB (@100trillionUSD) February 14, 2024
This fact raises questions about the true decentralization of Bitcoin, an aspect that many advocates deeply value.
The basis of Bitcoin’s decentralization lies in its blockchain technology, a distributed registry that is maintained by a network of computers (nodes) scattered around the planet, with no single entity having control over it. However, the preeminence of certain exchanges seems to run counter to this principle.
Additionally, following the words of Jamie Dimon, CEO of JPMorgan, who described Bitcoin as an object of little practical value and rather used for illicit purposes, Gensler adds that BTC is the currency of choice for ransomware.
This point of view emphasizes that, beyond its technological advancement, Bitcoin faces serious challenges regarding its use in the legal framework.
In comparing Bitcoin to traditional currencies such as the dollar, euro and yen, Gensler highlights a fundamental economic difference. While fiat currencies are used by society for everyday transactions and are backed by central banks, Bitcoin has no such institutional support or universal acceptance.
The idea that Bitcoin offers superior decentralization, according to Gensler, should not be a reason to invest in BTC. The nature of Bitcoin, beyond its innovative accounting record, is a crucial point of analysis for those investing in and interested in cryptocurrencies.
Gensler’s statements open the debate on the role of cryptocurrencies in today’s society and how concepts such as decentralization, security and legality can vary widely between different sectors.
