After 16 years of existence, what is Bitcoin's greatest risk?
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After 16 years of existence, what is Bitcoin's greatest risk?
"The biggest risk with Bitcoin is not being able to hold onto it."
Navigating Web3 tides with focused insightsAuthor: Mu Mu, Baicai Blockchain
For years, a saying has circulated in the crypto space: "The biggest risk of Bitcoin is not being able to hold it." At its core, this "not being able to hold" stems from differences in understanding and information. Sixteen years have passed since Bitcoin's genesis block was created, yet many people still feel uneasy, perceiving Bitcoin as "ethereal" and intangible. Rather than debating "what is Bitcoin's greatest risk," perhaps we should ask whether people’s deepest concerns about Bitcoin are actually unfounded...
01. The "Virtual" Nature of Cryptocurrencies
Cryptocurrencies like Bitcoin have long been labeled by some in the crypto community as "virtual" assets—a classification often viewed negatively. When people hear the word "virtual," they naturally associate it with something elusive or unreal, hardly seeming "legitimate" or "serious." Critics argue that virtual assets lack credit backing, insisting that money must be grounded in trust or tangible exchange, and therefore cryptocurrencies are ultimately just a dream.
This view resonates widely for good reason. By common understanding, currencies like the U.S. dollar or Japanese yen are backed by national credit—the stability of the United States or Japan guarantees their purchasing power. In contrast, cryptocurrencies appear out of nowhere, lacking such assurances. How can one trust them?
However, this perspective overlooks the technological value behind cryptocurrencies and misunderstands the concept of "consensus." Concepts such as blockchain technology, Web3, and decentralized finance have already demonstrated real-world applications in areas like global payments and clearing systems. More importantly, the consensus underpinning the value of cryptocurrencies is fundamentally the same type of consensus generated by traditional credit backing.
The reason money requires credit backing lies in the complexity of human society—we need a unified, powerful centralized institution to act as a trusted intermediary that establishes a foundation for consensus. But for decentralized systems, much like natural resources such as gold or river stones, their physical properties serve as inherent consensus mechanisms. Even without national credit support, everyone agrees that stones are hard, and that gold is shiny, corrosion-resistant, and valuable. This is precisely why ancient societies could use shells, stone coins, and gold as currency.
In short, what determines whether something has value is not whether it has credit backing, but whether there is consensus around it.
02. America's Tool for Global Exploitation?
In recent years, as the world's financial center, the United States has increasingly dominated the discourse on cryptocurrencies. Not only are digital assets priced in dollars, but spot ETFs listed on U.S. stock exchanges have attracted tens of billions in investments. Numerous publicly traded companies and financial institutions now hold Bitcoin, and even the incoming U.S. president appears determined to secure America's leadership in the crypto sector.
As the U.S. exerts greater regulatory control and influence over cryptocurrencies and the broader industry ecosystem, concerns are growing—some even believe this will turn crypto into another tool for America to exploit the world, just like the U.S. dollar.
This concern isn't entirely baseless. Greater influence means greater ability to manipulate the crypto market, making it easy to "harvest" retail investors worldwide. Consider past patterns: through financial innovation and dollar dominance, the U.S. draws global capital into speculative markets. If crypto prices collapse, capital may flow back into dollar-denominated assets—fitting the narrative of "dollar harvesting."
Still, this fear has limitations. Bitcoin, Ethereum, and other cryptocurrencies were not initiated or led by the U.S., but rather emerged bottom-up from grassroots innovation. Wall Street and other U.S. financial players only entered the space after these assets matured. Therefore, this isn't a premeditated "conspiracy" orchestrated by America, but rather an organic development driven by technological progress and market demand.
Moreover, public blockchains like Bitcoin and Ethereum are technically difficult to control. Even if mining pools and service providers are based in the U.S., their distributed nodes span the globe. While U.S. regulators might impose transaction censorship on domestic nodes, overseas nodes remain free to submit and broadcast transactions. It’s akin to gold mines scattered worldwide—local authorities can shut down operations within their borders, but cannot dictate how mines elsewhere operate.
Furthermore, the U.S. exploits global markets via dollar hegemony because it holds absolute control over the dollar. Can it exert the same level of control over Bitcoin? No. However, the U.S. can aim to lead Bitcoin adoption—as it does with gold, oil, and modern technologies.
On the other hand, the U.S. could marginalize Bitcoin within certain domains, but it cannot destroy it (if it could, Bitcoin would have died hundreds of times already). Given the deep entanglement of interests, especially with Wall Street heavily invested, the U.S. is unlikely to move against its own interests—at least not until those ties are severed.
03. Financial Inequality and Infinite Issuance?
Some argue that Bitcoin is unfair to ordinary people today compared to early adopters—this so-called "financial inequality." In reality, the Bitcoin network and community are open and accessible. As a public blockchain, it functions like a shared public resource—anyone can access information and submit transactions. The truth is simply that some individuals choose not to learn about or embrace new technologies, refusing to take that first step forward.
Others claim that Bitcoin’s 21 million cap is meaningless because its smallest unit is the satoshi, implying near-infinite divisibility.
This is a peculiar argument. Unit division has nothing to do with total supply. One liter of water can quench one person’s thirst; just because it contains 1,000 milliliters doesn’t mean it can satisfy 1,000 people. Changing units doesn’t change the total amount—it remains constant.
04. Conclusion
In summary, most objections to Bitcoin stem from misunderstandings. The era of dismissing it as merely "virtual" is over. From an obscure outsider to a mainstream asset, Bitcoin’s consensus and status have grown steadily stronger over 16 years, now capable of competing with gold. The U.S.'s increasing involvement isn't necessarily negative at this stage, though uncertainties remain—investors should beware of sharp volatility. We still believe that crypto and AI together will lead the reshaping of the digital age.
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