And I think that's exactly the point. Cryptocurrency promoters endlessly talk up how it's part of a decentralized wave of the future. But in practice it's quite centralized, and the incentives point in that direction for the future. That's one of the points made very well recently by Moxie Marlinspike: https://moxie.org/2022/01/07/web3-first-impressions.html
It’s not centralized though, crypto.com is one of many exchanges. Anybody can create an exchange, and a failure in one exchange doesn’t propagate to the rest of the network.
Do you consider a website breaking a single point of failure for the internet?
The original vision of Bitcoin was "a peer-to-peer electronic cash system" "allowing any two willing parties to transact directly with each other without the need for a trusted third party". So yes, something like crypto.com represents significant centralization.
Crypto.com and its customers are willing parties who can transact with each other using this system, I'm not sure what your point is. The problem here is that one party trusted another party to hold on to their funds, and the holding party lost the funds. How is that an indictment of the protocol itself?
Or put another way, how does Crypto.com and other centralized systems prevent me from using Bitcoin the "right" way?
Did you read the Marlinspike post? I think he's pretty clear on the issues.
But in brief my point is that as with internet itself, a protocol that allows for decentralization is not sufficient for something to be truly decentralized. Despite the vast amounts of hype about the decentralization of cryptocurrency and "web3", in practice we are seeing that it's tending toward centralization. Which personally I don't care about except the extent to which I still have to listen to the hype that has less and less connection to the practical reality.
It’s not an indictment of the protocol, so much as it is saying that the protocol is too low-level for average users and therefore centralized players (like Coinbase) tend to step in and provide the desired service.
It’s not centralized though, chase.com is one of many banks. Anybody can create a bank, and a failure in one bank doesn’t propagate to the rest of the market.
Yup, in that sense banks are decentralized in a way..although there is a bank called the "central bank" that creates the base monetary supply, so not sure I totally agree with the comparison..
But yes, I would agree that banks are about as decentralized as crypto exchanges. But that's kind of the point, you shouldn't conflate exchanges (or banks) with the currency itself.
It’s objectively dumb to look at a service provider and conflate that with what the proponents are talking about.
Have you considered that you are in the wrong decade? Its year .. 13..? Its time to be up to speed on this.
If you run into a proponent that is also conflating these things you should simply correct them about the difference between onchain activities and third party centralized service providers, which means educating yourself first.
The only reason the hacker gets to keep the funds and have no civil or criminal liability is because of them using the actual decentralized rails and uncensorable contracts such as Tornado.cash
I believe in bitcoin, works well and I don't blame the consumer for the producer's problems when it comes to power.
But exchanges have become a key part of the implementation.
That's not the real issue though. The issue is the _need_ for exchanges. They provide a host of services, mostly all of which are antithetical to the loftier ideals espoused by bitcoin.
Too many crypto fans waltz passed this glaringly obvious issue and these kinds of stories will never go away as a result.
If banks get hacked, nobody blames the internet. "a small sub section of the system" applies as aptly to the blockchain as it does the global financial system, and I'm pretty confident being a locally popular trading commodity amongst edge communities is not the central goal for bitcoin
> and I'm pretty confident being a locally popular trading commodity amongst edge communities is not the central goal for bitcoin
Given the transaction fees needed for a distributed-enough network, and the bureaucracy needed when trading, it is not very useful as a currency, at least not for small payments, excluding Lightning.
I agree. Imagine if a centralized system was compromised and every single account holder was at risk. Instead there is only a small sub-section of accounts that were vulnerable, thank goodness for that.
The allude from my naive point of view is that n_time thinks we're lucky the network is decentralized and that users are spread out over various wallet software and services, so the impact of the issue was only related to a sub-section of the network as a whole. But I might just misunderstand the sarcasm or something.
Well, traditional banking is much more decentralized in this sense, as there are many more banks than crypto exchanges, and the vast majority offer payment apps etc.
Unless by "it" you mean crypto.com and not Ethereum. Crypto.com is not decentralized.