This is the Way Crypto Will End: Not With a Bang but a Whimper
I am going to start this post by saying that I love blockchain as a technology. It is a genius idea to leverage the power of connected, ubiquitous networks. Right now I have a total of 4 internet connected devices at arms reach; all with vastly more computing power than the computers we used to send humans to the moon. This ease of access and constant connection is the thing that makes the blockchain backbone to cryptocurrency work. With everyone constantly connected to a network the shared data on that network can be processed and distributed to every member on the network. A “distributed ledger” is the term most widely coined in the crypto world.
In its simplest form, a distributed ledger is a database held and updated independently by each participant (or node) in a large network
https://www.coindesk.com/learn/what-is-a-distributed-ledger/
This is the list of transactions. That list is shared with everyone on the network. So everyone involved in the scene can validate and verify the truthfulness of transactions (this is the mining – we will cover this later). That is the part of crypto where there is a true power. The cryptocurrency part is only one utility. Currently makes sense as transaction can be linked and validated, but there are plenty of underutilized potential with this form of trust verification.
No single entity like a bank, lawyer, or government agency is in control of the truth. It is decentralized. The network of your peers validates the system and they want the system to work because it is their network too. Everyone is bought in and they are want the system to grow and succeed and be bug/hacker free.
IT IS A UTOPIA RIGHT?
WRONG!
So that was a long winded explanation to why blockchain is great to create a perfect system (just like communism would be great, if it wasn’t for the damned people). The problem is that cryptocurrency is going away from the ideal of a true distributed network. Yes, you are going to say, “BUT… decentralized blockchain is the backbone to bitcoin, how can it be going against that tenant of crypto?” True the ETH and BITCOIN are still decentralized cryptocurrencies with a distributed network- BUT the way people are accessing them is not from the network. They are getting into crypto form centralized exchanges. Notice the term centralized. These are completely against the design of decentralization. When you enter these exchanges (Coinbase, Binance) the crypto you are buying is not really your crypto.
NOT YOUR KEYS, NOT YOUR COINS. IT’S THAT SIMPLE.
Its possible Kraken will be put in a position where told to freeze assets by police without judicial consent. And ye will probably comply
Originally tweeted by degderat.eth 🦇🔊 (@degderat) on February 17, 2022.
While yes these exchanges are getting more people into crypto, which is increasing the value and speculation; they are also taking the people out of the blockchain network it was designed to be.
“Those who cannot remember the past are condemned to repeat it.
Limp Bizkit
In 2014 the Mt Gox hack happened. Mt Gox made it easier for people to get into Bitcoin at the time, but at the cost of owning and protecting your own private keys. That was the first big central Bitcoin exchange, and when it got hacked and disappeared people thought that was the death of bitcoin. It bounced back due to the resilience of the network. IF the network keeps getting deluded and people are not really on the network who knows if it can withstand another centralized failure that the system was not designed for. Cryptocurrently will still be there, but it will not be the true decentralized system. It will be controlled by elites and companies just as banks and credit cards are… This is (and will) happen slowly. Soon everyone who “owns” crypto will instead invest in crypto conglomerates.
ALL HAIL CRYPTO-CONGLOM-O