A post I think the main concern here is that these large holders could influence Bitcoin’s consensus rules to impose censorship.
When talking specifically about censorship, the centralization of mining actually poses a more direct threat. But if only the miners were censoring, the censorship would last only as long as the majority of miners were willing to continue doing so, at the expense of losing transaction fees. If and when the censorship stopped, transactions would start to be confirmed again as if nothing had happened.
If economic nodes were to also impose censorship as new protocol rules, however, this could actually be considered a soft fork. In this scenario, miners cannot escape censorship without splitting the blockchain between “updated” (censored) and non-updated nodes; this would constitute a hard fork. Buyers and sellers of the two versions of bitcoin would then determine which blockchain has more value; this is why some bitcoiners are worried about governments and other large institutions hoarding a significant share of bitcoin’s supply.
It’s a reasonable concern and something to be aware of. At the same time (and similar to my argument in this Take), it doesn’t seem obvious to me that governments or large institutions would be willing to risk everything by betting on a Bitcoin censorship fork. But more importantly, there isn’t much we can do to stop governments or other institutions from purchasing bitcoin anyway, nor should there be, as that would (ironically) in itself represent a form of censorship.
The best countermeasure, in this regard, has actually already been proposed by Nikolaus: do not sell your bitcoins to MicroStrategy.
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.