Vitalik Buterin the creator and co-founder of Ethereum, has by no means shown any intention of bucking the trend of liberalism that has dominated the crypto space since the advent of Bitcoin and blockchain in 2009. As an advocate of decentralization, he has been quite vocal on the subject of thwarting attempts by major corporations to take control of the budding industry.
Eliminate the Bigwigs
In a recent interview with a journalist from TechCrunch, the Ethereum co-founder criticized centralized exchanges for charging huge listing fees that ultimately give the exchanges power over which crypto makes it big. He said that “these crazy ten to fifteen million dollar listing fees” determine which cryptocurrencies “become big”, thereby compromising further decentralization and sacrificing “openness and transparency”
Buterin believes that the best way to develop reliability and transparency in decentralized platforms is to eliminate the “stupid king-making power” that is currently being held by centralized cryptocurrency exchanges. He further added to his remarks on centralized crypto exchanges by saying:
I definitely personally hope centralized exchanges burn in hell as much as possible.
What Is the Problem With Centralized Exchanges?
One of the biggest offsetting traits of centralized exchanges is their ubiquitous control over the entire trading and exchanging process. Basically, a centralized exchange is designed such that they act as middlemen between the trader and the cryptocurrency. As a result, they mostly end up acting like banks that offer security, with some even offering crypto storage in the form of wallets. Given that they are both important and useful for daily crypto transactions, they have grown such that the user / trader has limited control. On the other hand, decentralized exchanges give control and ownership back to the users.
Buterin was able to demonstrate this with an example; where decentralized exchanges have an advantage over centralized ones, by illustrating how a decentralized exchange gives users a choice. According to Buterin, even “if someone puts a gun to his head and tells him to write a hard fork patch…Relatively few users would eventually download and use the update as a decentralized platform gives users choices.” That, according to Buterin “is called decentralization.”
In contrast, even though Buterin has been an avid advocate for decentralization, this approach has been identified to have its own set of faults. For instance, since traders on a decentralized exchange set the take orders by themselves, having the orders exist separately brings about the issue of liquidity. In fact, Buterin’s Ethereum platform has been called in to question over its degree of decentralization by some experts. Ethereum’s conflicting mining pools have been brought about by groups of miners looking to dominate and control the ETH network.
What do you think about Buterin’s opinions on centralized exchanges? Share your thoughts with us in the comments section.