Regulatory capture is a form of government failure that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or political concerns of special interest groups that dominate the industry or sector it is charged with regulating. When regulatory capture occurs, the interests of firms or political groups are prioritized over the interests of the public, leading to a net loss to society as a whole. Government agencies suffering regulatory capture are called “captured agencies”.
In this scenario, we have 2 groups colluding to capture the regulatory capabilities of bitcoin. Bitcoin works by having separate groups working in harmony to the economic benefit for themselves and for the network and its owners/participants.
The miners, who’s duty it is to order transactions and timestamp, do not have very much power over bitcoin as an individual group. They will not mine at a loss for any long period of times and the users of bitcoin via market mechanisms determine the price, and therefore the profitability of miners hashing.
But if miners collude with centralized financial hubs, e.g. exchanges, fiat bridges, market makers, etc, then this collusion presents a real regulatory capture attempt upon the bitcoin network. If exchanges refuse to process bitcoin transactions, or if large entities claim that bitcoin is not bitcoin and that the non-incumbent challenger is bitcoin, then this suppresses free will and free market mechanisms from naturally occuring within the marketplace and can have drastic effects upon outcome.
I ultimately believe the attempt will fail, but there is no guarantee that there will not be massive damages done to the ecosystem as the result of the takeover, just like when a country rebuffs an invasion from a hostile army, they do not come out of the war without wounds both physical, mental and socioeconomic.
I have been around this sub reading since late 2012, and participating since 2013. I have watched Jeff Garzik talk about bitcoin core being the modern version of the church, claiming that we are just trading Monarchs for “cabals of priests”.
Except now Garzik has been elected the Pope of that church (B2X), and the parliament (DCG/Silbert & Friends + Miners) has been corrupted to support his actions, building a populist movement against science and academia. He is now the single developer of the B2X codebase and is so incompetent that he could not even get a single line code change correct without help from core, let alone rebase 0.15.x codebase to b2x, blaming non-existent bugs to hide his incompetence. And this is the same guy who just announced a 20% premined ICO for a altcoin that has even B2X supporters confused. Oh, and who invested in that premine? Yup, you got it! DCG Group!
So wait, the DCG group is funding a hostile takeover of the bitcoin project to install a single developer to control the codebase, colluding with a majority hashrate of miners to attack the network, without replay protection, all while funding a competitor?
Now, as we dig a little deeper, we find out that the majority of B2X proponents are funded by DCG, and DCG itself is basically a bankers cabal. Lets also not forget that DCG funded coinbase!
So we now have the largest financial $USD bridges that are operating as the platform to bridge bitcoin to $ colluding with centralized mining pools to force invalid rule changes upon the network.
Let us also not forget the multimillion deal between bitpay and bitmain and that bitpay used to be pro-core before this takeover.
Guys, this is so blatantly the biggest institutional driven threat bitcoin has ever seen. They are engaging in classic regulatory capture behavior attempting to centralize control by colluding with multiple factions that would normally balance each other. This is not very much different from the “Pillars of Democracy” (Federal, Executive, Judicial) balancing each other out for the best interests of the public. But just like democracy, a decentralized system can and will be captured if we allow complacency and apathy to dominate our behaviors.
Say what you will about Bitcoin Core and Blockstream, at least they adhere to cypherpunk principals. At least they engage in open and transparent actions and give users the free will by providing opt-in open source code.