There is a philosophy behind cryptocurrency. One that goes far beyond the buzzwords and complicated lingo that only a handful of us truly understand, and it all centres around the fact that there is no centre.
At its core, cryptocurrency embodies decentralization. Yet there are growing players within the crypto economy that threaten our digital democracy. Exchange platforms such as Binance are a perfect example of how crypto consumers can be tempted to forgo their independence and compromise the decentralized philosophy.
Decentralization is the defining trait of Cyprtocurrency
Decentralization is far more than an approach to technological developments. Rather, it is a belief that there should never be a single centralized point of control or a disproportionate influence in any given situation. The result is democracy, security, efficiency and an inevitable decrease of exploitation.
For all our history, we have been reliant on centralized forms of finance, on a third trusted party usually in the form of banks.
The practical downsides of centralized finance are plentiful and acute. We have seen cases of grand inflation crippling economies, and abuse of power that has caused full country’s financial collapse.
When you no longer hold the keys to your decentralized kingdom
Philosophically we all know that too much power held by one body is disastrous.We have seen this in places far beyond the economic spectrum. It is why everyone links the word ‘dictatorship’ to bad and ‘democracy’ to good.
It seems kind of ironic then, that one of the fastest growing forces in the crypto spectrum is roping us back in like cowboys to the very ideal from which we are running.
I’m talking about Binance, the global cryptocurrency exchange run by Changpeng Zhao.
The dangers of the Binance bubble
Binance, created in 2017, has grown exponentially since it’s inception and is now the most popular Crypto trading system out there. Sure, it’s easy to use, it’s simple, and it makes the most amateur of crypto consumers feel like they have a safe space in which to explore thesometimes-dauntingecosystem…but philosophically, it goes against the very grain of what crypto stands for- decentralization.
CZ may seem like an approachable guy with his never-ending stream of quirky Twitter comments, but the man is practically a crypto God at this point. Do we realize that when we put our coins in the Binance platform, we are making ourselves completely vulnerable to the whims of a mortal man? And sure, he seems fair to us now, but he is only human.
This sentiment is gaining traction with many users expressing their fear of CZ’s growing power and his infinite control over the coins on the Binance platform.
But lets leave CZ alone and assume he is some angel saint that is infallible to the temptations of power… look what happened in May when Binance revealed that they were a victim of a “largest scale security breach” in which hackers stole 7,000 bitcoin which was worth U.S. $40 million at the time.
You see, as a centralized exchange, Binance has unavoidable downfalls. It is more prone to attacks, funds can be frozen, there is a central point of failure, and something we seem to forget- you no longer own the private keys to the wallets!
There are multiple users on Reddit who have complained about waking up to find their funds gone. Just like that… And the response from Binance? Your account got hacked and there is nothing they can do about it.
The only way forward
Our unquestionable faith in Binance as the go-to crypto exchange could have dangerous consequences. Rather than be tempted by the easy-to-use platform, we should rather be pursuing a peer-to-peer system.
The crypto community must aim at achieving the crypto philosophy, one of subverting traditional hierarchical systemsand moving towards a resilient and transparent future….and Binance is doing it’s best to side-track us.