4 ms·

Cryptocurrency is so decentralized that most of it is held in a hand full of exchanges (aka, centralized). It seems the crypto community also does not care abo

Cryptocurrency is so decentralized that most of it is held in a hand full of exchanges (aka, centralized). It seems the crypto community also does not care about the obvious centralization, but who would've ever thought major contradictions would come out of cryptocurrency?

jwatte 9y ago
With Bitcoin or ether, I can hold the currency on paper wallets without Central storage, and immediately spend it if needed. Not as easy with cash, and impossible with checking/credit accounts.
mike741 9y ago
the decentralization of cryptos like bitcoin refers to the source of the money (the miners), not its end location. most of the "contradictions" come down to misunderstandings like this. there's nothing that forces me to use a particular exchange and if the exchange crashes it will not affect my personal wallet, and i can feel safe knowing no 3rd party can come bail out the failed exchange at my indirect expense.
- mcguire 9y ago
  "... i can feel safe knowing no 3rd party can come bail out the failed exchange at my indirect expense." Er, well, no. You can feel pretty safe that no 3rd party will come bail out the failed exchange, but I'm not sure how you could conclude that they could not. At least, until all the bitcoins have been irrevocably lost.
smokeyj 9y ago
> It seems the crypto community also does not care about the obvious centralization Again, more lies. Where did you get this information? Everyone in crypto knows the biggest risk are the exchanges. I'm curious, who takes time out of their day to villainize a database architecture? People are getting desperate.
- bdcravens 9y ago
  > Again, more lies. Where did you get this information? 97% of Bitcoin is held by 4% of addresses - textbook centralization. (http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-addresses-2018-1 http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-a...) Now that can be whales, or it can be exchanges, which isn't clear. However, calling someone a liar for stating the fact that Bitcoin isn't the decentralized utopia you've dreamed of is uncalled for. > Everyone in crypto knows the biggest risk are the exchanges. Alot of crypto is purchased and held by people who aren't "in crypto" but are just normal people who have a FOMO.
  - mcguire 9y ago
    It should be possible to separate whales from exchanges since the ledger is public, no? The latter would seem likely to have many more transactions with many more counter-parties. (I've been mildly interested in this question for a while, since it seems like them as got into bitcoin early ought to be whales, right? First come, first served and all.)
  - smokeyj 9y ago
    > does not care about the obvious centralization Was there a poll of the community? We're lumping in early adopters of "the web" with promoters of the dot com bubble. The position is uneducated at best and disingenuous at worst. I suspect "Kai" benefits from click bait.
- ShorsHammer 9y ago
  The exchanges hold a good portion of all cryptocurrency in existence on behalf of others. "Everyone in crypto knows" perhaps, but their actions suggest that centralised services are preferred by most and this is entirely verifiable. Anecdotes certainly aren't as effective in the blockchain world. https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... https://ethereum.stackexchange.com/questions/886/which-ethereum-accounts-have-the-most-ether https://ethereum.stackexchange.com/questions/886/which-ether...

jwatte 9y ago

With Bitcoin or ether, I can hold the currency on paper wallets without Central storage, and immediately spend it if needed. Not as easy with cash, and impossible with checking/credit accounts.

mike741 9y ago

the decentralization of cryptos like bitcoin refers to the source of the money (the miners), not its end location. most of the "contradictions" come down to misunderstandings like this. there's nothing that forces me to use a particular exchange and if the exchange crashes it will not affect my personal wallet, and i can feel safe knowing no 3rd party can come bail out the failed exchange at my indirect expense.

mcguire 9y ago
"... i can feel safe knowing no 3rd party can come bail out the failed exchange at my indirect expense." Er, well, no. You can feel pretty safe that no 3rd party will come bail out the failed exchange, but I'm not sure how you could conclude that they could not. At least, until all the bitcoins have been irrevocably lost.

smokeyj 9y ago

> It seems the crypto community also does not care about the obvious centralization Again, more lies. Where did you get this information? Everyone in crypto knows the biggest risk are the exchanges. I'm curious, who takes time out of their day to villainize a database architecture? People are getting desperate.

bdcravens 9y ago
> Again, more lies. Where did you get this information? 97% of Bitcoin is held by 4% of addresses - textbook centralization. (http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-addresses-2018-1 http://www.businessinsider.com/bitcoin-97-are-held-by-4-of-a...) Now that can be whales, or it can be exchanges, which isn't clear. However, calling someone a liar for stating the fact that Bitcoin isn't the decentralized utopia you've dreamed of is uncalled for. > Everyone in crypto knows the biggest risk are the exchanges. Alot of crypto is purchased and held by people who aren't "in crypto" but are just normal people who have a FOMO.
- mcguire 9y ago
  It should be possible to separate whales from exchanges since the ledger is public, no? The latter would seem likely to have many more transactions with many more counter-parties. (I've been mildly interested in this question for a while, since it seems like them as got into bitcoin early ought to be whales, right? First come, first served and all.)
- smokeyj 9y ago
  > does not care about the obvious centralization Was there a poll of the community? We're lumping in early adopters of "the web" with promoters of the dot com bubble. The position is uneducated at best and disingenuous at worst. I suspect "Kai" benefits from click bait.
ShorsHammer 9y ago
The exchanges hold a good portion of all cryptocurrency in existence on behalf of others. "Everyone in crypto knows" perhaps, but their actions suggest that centralised services are preferred by most and this is entirely verifiable. Anecdotes certainly aren't as effective in the blockchain world. https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html https://bitinfocharts.com/top-100-richest-bitcoin-addresses.... https://ethereum.stackexchange.com/questions/886/which-ethereum-accounts-have-the-most-ether https://ethereum.stackexchange.com/questions/886/which-ether...