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This actually helps with decentralization since there are usually multiple exchanges and it's very rare for 1 exchange to hold more than 10% of all tokens.
by cryptica 5y ago
This actually helps with decentralization since there are usually multiple exchanges and it's very rare for 1 exchange to hold more than 10% of all tokens.
- runeks 5y agoI’m not saying you’re wrong, but what’s the source of that estimate?
- cryptica 5y agoI'm a blockchain developer. Worked on a top PoS blockchain for several years then launched 2 additional PoS blockchains since. I've also analyzed many other PoS blockchains over the years. Exchange wallets improve the security of a PoS blockchain because these wallets are high-exposure and community can be confident that the different exchange wallets belong to different entities. Because the ledger is public, existing big token holders can agree to HODL some % of their tokens if they are concerned that an attacker is trying to acquire 50% of all tokens. The main concern in PoS are 'sock puppets' - One person controlling multiple accounts pretending to be multiple different people (to evade detection). Because exchange wallets are well known, community can be confident that they are not sock puppets; this means that exchanges add some degree of security to the blockchain... In aggregate, those tokens are safe; it's extremely unlikely that all exchange wallets would be hacked at the same time (unless there is something wrong with the blockchain code).