Bitcoin Runs on Code — But Markets Run on Human Nature

Written By Ferdie James Nervida

Why the blockchain is trustless, but the trading ecosystem still needs rules

The Myth of Total Decentralization

"Decentralized." It’s Bitcoin’s battle cry — the promise of a system where no single entity calls the shots.

But here’s the visual that bothers skeptics: five mining pools controlling over 60% of Bitcoin’s hash rate. It looks like a cartel — until you look closer and understand how mining, custody, and protocol governance actually work (b10c, 2025).

Most large wallets? They don’t belong to whales. They’re held by exchanges on behalf of millions of users (BitInfoCharts, 2025). The power looks concentrated until you realize: Foundry’s 30% hashrate serves institutional miners (Hashrate Index, 2025); AntPool’s ‘proxy pools’ mask coordination, effectively consolidating control under a single entity (b10c, 2025). Decentralization isn’t binary — it’s a spectrum of checks and balances.

The bigger misunderstanding is this: decentralization isn’t about who holds the coins. It’s about who can change the rules. And in Bitcoin, that power is off-limits — even to billionaires.

Who Really Controls Bitcoin?

On paper, Bitcoin’s ownership and mining power look centralized. As of 2025, just 100 addresses hold over 14% of all BTC. A handful of mining pools process the majority of blocks (BitInfoCharts, 2025; b10c, 2025).

But the picture is less dramatic when zoomed in. Those wallets? Mostly exchange hot and cold storage. Those pools? Made up of thousands of independent miners.

That said, things aren't perfect. Some proxy pools — like AntPool and its close affiliates — broadcast identical block templates, hinting at coordination. It’s not a hostile takeover, but it does blur the line between decentralization and logistical convenience.

Still, no entity — no wallet, no miner, no company — can unilaterally rewrite Bitcoin’s consensus rules. The protocol is governed by independently run nodes spread across the globe (Nakamoto, 2008; Antonopoulos, 2017). That’s what makes Bitcoin resilient.

The Market Is Still a Battlefield

Bitcoin’s protocol is predictable. The market around it isn’t.

One tweet. One dump. One whale blinking twice. That’s enough to tank the price or send it soaring.

In late 2025, wallets holding over 10,000 BTC reduced exposure as Bitcoin pushed past $111,000 (BitDegree, 2025). Coordinated sell-off? Maybe. Manipulation? Possibly.

Spoofing — placing fake orders to distort the order book — is still common in crypto. So is wash trading. Both create an illusion of demand or panic that retail traders react to. And without consistent regulation, enforcement is hit or miss. On-chain activity can reveal patterns of abuse, but spotting them reliably still requires better tooling and clear accountability.

The code runs on math. The market runs on psychology.

What Needs Guardrails — and What Doesn’t

Bitcoin doesn’t need a redesign. But the system around it does.

The blockchain works fine. The problem is everything built on top — exchanges, custodians, liquidity providers. That’s where rules are thin and incentives are skewed.

The fix? Rules that mirror Bitcoin’s own design: transparent, automated, and resistant to capture. Like traffic laws that govern drivers but don’t redesign roads:

  • Require disclosure of large transactions, especially from institutional wallets.

  • Enforce real-time audits of exchange reserves.

  • Crack down on spoofing, wash trading, and fake volume.

  • Push adoption of Stratum V2, which lets individual miners, not pools, decide which transactions to include.

  • Encourage MiCA-like standards for transparency — a regulatory framework originating in the European Union that focuses on crypto-asset service provider accountability.

  • Align with frameworks like the U.S. SEC’s 2025 crypto-market guidelines to standardize market conduct.

Even good regulation has limits. Cross-border enforcement is hard. Jurisdictions clash. But saying “it’s hard” isn’t a defense. The alternative is letting markets rot from the inside.

Bitcoin maximalists will disagree — and that’s fine. But decentralization without accountability is just chaos in disguise.

Fix the Market, Not the Code

Bitcoin’s rules are clear. The network doesn’t blink. The ledger doesn’t lie.

But markets are murkier. They reward the loudest, the fastest, the best capitalized. And sometimes, the most manipulative.

If we want Bitcoin to stand for more than just uncensorable code, we need to fix the playing field around it. That means building market rules with the same rigor that built the protocol.

The next evolution isn’t technical — it’s cultural.

Let’s make the markets as resilient as the blockchain that backs them.

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Ferdie James Nervida
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