In the BTC economy, most things thrive on memes about decentralization, opposition to the central bank, criticisms of fiat money, and a notion of self-sovereignty. Small blockers pride themselves on their independence from the mainstream and only relying on their home node.
But all is not well with the blockchain world. In reality, most developers, infrastructure partners, crypto news media, influencers, exchanges, custodians, and hash power belong to a very small group of venture capital circles. Reid Hoffman, for example, sits on the board of Microsoft via LinkedIn, and also sits on the board of Blockstream; creating an unholy trinity of great tech titans and BTC.
What do LinkedIn and Blockstream have in common? pic.twitter.com/iCCeTaGeXB
— Kurt🍌🍌GorillaPool.com ✪ (@kurtwuckertjr) May 4, 2022
But that’s for another story!
Group of digital currencies (DCG) is one of the main control centers for “big tech” and “old money” in the BTC economy. It is a conglomerate of venture capital groups founded in 2015 and managed by renowned Wall Street investment banker Barry Silbert with funds from Mastercard, Bain Capital, Transamerica Ventures, CME Ventures, FirstMark Capital and New York Life, among others.
According to Silbert, “What we are building is the largest seed investment portfolio in the digital currency and blockchain ecosystem,”
And he was doing it/doing it alongside a very interesting group of old world financial industry advisers.
- Lawrence Summerscandidate for president of the Federal Reserve and chief adviser to the World Bank.
- Matt Harrispartner at Bain Capital (founded by Mitt Romney.)
DCG wallet is run by Grayscale Investments and Genesis Trading which are companies started by Silbert that predated the founding of DCG, and they collectively own CoinDesk Publishing as the PR wing of their empire. The group also holds significant stakes in most of the big names in the bitcoin economy: Coinbase, Abra, BitGo, Kraken, Lightning Labs, Ripple, Blockstream, Xapo, BitPay, BlockchainDotCom, Circle, etc. a lot After. In classic venture capital fashion, DCG’s control over much of the ecosystem allows them to strongly influence various narratives and ensure victory regardless of varying outcomes.
Laura Shin said in Forbes in 2015, “…the exchanges they have invested in represent 40% of all global Bitcoin trading volume, which gives the company the opportunity to work on global exchange alliances, the standardization and cross-collaboration. This is just one example of how Silbert envisions the company will foster the digital currency ecosystem.
It sounds like a very nice way of saying that DCG intended to control the ecosystem, and in many ways they ended up doing precisely that.
Considering DCG’s role in the scaling debate, New York Accord and conflicts of interest within their own portfolio, it becomes conceivable that everything we’ve been through in bitcoin has been according to a centralized plan, rather than an organic product of competing influences. Is it possible that the New York Accord (the most popular plan to increase BTC’s block size limit) was simply a ruse designed to take power away from Chinese interests and bitcoiners who were looking to see honest nodes govern consensus? It is possible, yes.
With miners flagging “NYA” as a way to declare their support for increasing the block size limit through cooperation between honest nodes, small blockers were able to change the entire course of bitcoin’s history quickly and with very little practical resistance. Within months, the popular NYA was dead, the big blockers had split, and everyone advocating changing the protocol away from Bitcoin’s antifragile incentives was suddenly in charge of the largest proof-of-work network on earth. The big blockers have all been taken down a path that has led to very practical results for parent companies across the portfolio, and heavily at the expense of bitcoin itself, and it seems clearer over time than DCG is little more than a front to destroy Bitcoin and rewrite the story of Satoshi Nakamoto.
DCG isn’t talked about as much as it used to be, and that could also be intentional. The culture has decided that BTC was never an electronic payment system, and BTC conferences are sponsored by payment companies like CashApp, which were built on the warm grave of BTC’s disruptive payment features.
But their holding companies still persist. Incubated by big tech and big finance, companies like Blockstream, Coinbase, BitPay and Kraken are now suing Dr. Craig Wright in a bid to take away his rights to the Bitcoin White Paper and silence the big blockers forever. And Wright recently announced litigation against Coinbase, Kraken, and others to remove their ability to use “Bitcoin” to describe BTC, BCH, and other assets under the auspices that their use of the Bitcoin name is some kind of fraud. consumption known as “pass.”
Will the fight against Bitcoin last forever? They say the price of freedom is eternal vigilance. This may also be our challenge in Bitcoin.
To follow The CoinGeek Crypto Crime Cartel series, which plunges into the flow of groups – one of BitMEX for Binance, bitcoin.com, Blockstream, Metamorphose, Coinbase, Ripple,
Ethereum, FTX and Attached—who co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) market players.
New to Bitcoin? Discover CoinGeek bitcoin for beginners section, the ultimate resource guide to learn about bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.