People tend to celebrate periods of low fiera. It is time to clean the house, consolidate any necessary UTXOS, open or close any lightning channels that you were waiting for and register a stupid 8 -bit JPEG in the blockchain. They are perceived as a positive moment.
I am not. In recent months we have seen an explosive appreciation of prices, finally hitting the 100,000 USD benchmark that everyone has taken for granted as preordained during the last market cycle. It’s not normal.
The image on the left is the average feedarage every day from 2017, the image on the right is the average price every day since 2017. When the price was pumping, when it was highly volatile, we historically saw Ferat Spike consequently. Generally correspond to growth and peak when the price has done. People who buy and actually sell on Chain, people took their coins in custody when they bought them.
The latter leg up to over 100k does not seem to have had the same proportional effect on Fearates at all that moves even before in this cycle. Now, if you actually looked at both of these graphics, I’m sure many people are going “What if this cycle was in the end?” It is possible, but let’s say it’s not for a second.
What else could this indicate this? That the participants who are guiding the market are changing. A group of people who were dominated by individuals who self-cavet, who managed their risk of counterparty by removing the earnings from the exchanges, which have generated activities on chain sensitive to time, are transforming themselves into a group of people who simply passed around the ATF actions that do not need to settle anything on the chain.
It is not a good thing. Bitcoin’s very nature is defined by users who interact directly with the protocol. Those who have private keys to authorize transactions that generate revenue for miners. Those to which funds are sent and verify transactions against the rules of consent with the software.
Both of these things are removed from the hands of users and placed behind the custodian veil puts at risk the very stability of Bitcoin’s nature.
This is a serious existential problem that must be solved. The entire stability of consent around a specific series of rules is based on the assumption that there are quite independent actors with separate interests that diverge, but are aligned on a value obtained from the use of this set of rules. The smaller the group of independent actors (and the greater the group of people who “use” bitcoin through those actors as intermediaries), the more practical it is to coordinate to change them basically, and the more likely it is that their interests as a group spread in synchronizing the interests of the wider group of secondary users.
If things continue to trend in that direction, Bitcoin very well could end up incorporating anything that those of us here today hope it can. This problem is both technical, in terms of Bitcoin downsizing in a way that allows users to independently have control of their funds on Chain, even if only through the worst case, but it is also a problem of incentive and risk management.
The system does not only have to downsize, but must be able to provide ways to mitigate the risks of cars -custia to the extent that people are used to the traditional financial world. Many of them really need it.
This is not just a situation as “do the same thing I do because it is the only correct way”, this is something that has implications for the fundamental properties of the long -term bitcoin itself.
This article is a socket. The opinions expressed are entirely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.