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The main proposition of crypto (aside from speculation because "graph goes up") is that you don't need a centralized exchange. Then all these centralized excha

The main proposition of crypto (aside from speculation because "graph goes up") is that you don't need a centralized exchange. Then all these centralized exchanges popped up to make it easier. Whenever I see these types of announcement I have two reactions: a) I cheer, because the sooner the pyramid collapses the less the damage. b) I'm sad because these are real people losing real jobs

cowtools 4y ago
real jobs? Also, I don't think that the main proposition of cryptocurrency is that you don't need a centralized exchange. If you want to exchange fiat for cryptocurrency via the credit card or bank transfer, you need a trusted peer who can accept those forms of payment- whether that's a business or an individual. The centralization and insecurity of exchanges is due to their weakest link- the centralization and insecurity of the fiat system.
- bluelightning2k 4y ago
  Yeah I agree. That was kind of my point also -- the "decentralized" block-chain is pretty reliant on centralized exchanges. Real jobs is an interesting one. To the individuals yes they are real. To the economy there is no value creation and therefore the work done by these companies is just ultimately burning investor dollars & the planet in a lose:lose situation (as with everything crypto related).
  - birracerveza 4y ago
    > the "decentralized" block-chain is pretty reliant on centralized exchanges. ...for now
- chrisseaton 4y ago
  > real jobs? If someone’s paying you then it’s a real job.
SilasX 4y ago
The main purpose of cash (aside from drug empires) is that you don’t need a centralized service to make transactions. Then all those banks and wire services popped up for cases where physical cash doesn’t work.
lolinder 4y ago
I'm as much of a crypto skeptic as the next guy, and there are plenty of decentralization failures in crypto, but you can't have "all these centralized exchanges". The fact that there are so many suggests something worked. I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.
- 2muchcoffeeman 4y ago
  >As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized. I once asked a friend who had signed up to some crypto exchange "Do they just give you your keys when you sign up?". They replied, "What keys?" Eventually they found it. But it's not like they educate the user.
  - birracerveza 4y ago
    The cool thing is that you can use a centralized exchange and not even know about what keys are, or use the network as it is intended and not rely on a centralized entity. What's bad about having more options?
    - 2muchcoffeeman 4y ago
      This is bad because who ever controls the keys controls the coins. So really for all these clueless users, the exchange owns all the coins and you can’t prove otherwise. And they don’t bother educating the user. Or suggesting best practice. That’s not in the users favour.
- hnthrow1010 4y ago
  >I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized. Can't you see this defeats the whole purpose though? By this logic, traditional banks are also decentralized because you can also take your money out and go to a different bank. The word "decentralized" has no meaning in crypto parlance, it means whatever the speaker wants it to mean at any given time. And at least banks are FDIC insured, when a crypto exchange loses all your money then you can't really pick up your keys again because everything is just gone.
Veen 4y ago
The main benefit of exchanges is that they generate market liquidity. It's certainly possible to trade crypto without an exchange, but it's much more difficult to find buyers and sellers. I suspect that something akin to an exchange would always come about when there are lots of people who want to trade conveniently.
throw8383833jj 4y ago
i know here on hacker news we tend to see everything from the technical perspective and that means bitcoin isn't very interesting. But, try and see things from a financial perspective. the value proposition of crypto has nothing to with decentralization. Bitcoin isn't about Bitcoin. The reason bitcoin is valuable has more to do with what's happening with governments and fiat currencies than anything about crypto or bitcoin. Ask anyone, why they got into bitcoin, ask any company that got into holding bitcoin instead of cash: they'll tell you: It basically boils down to "I lost faith in fiat". There's been a huge 50 year bond bubble brewing and 100 year government bubble brewing where govt uses larger and larger amounts of GDP with ever larger debts. The explosion of debt is insane. Ask any financial professional, and they'll tell you with all that leverage in the system, there absolutely WILL be a deleveraging. The govts of the world will NOT be able to meet all their obligations. They can't raise taxes and they can't cut spending. That means, they must default on their currency (this is basically just a huge huge tax on anyone who's holding cash or bonds, even if inflation only stays at 10%, that 100K tax per year on anyone holding a million dollars). And when the Dollar and all the other fiats of the world go bust, you're only going to want to hold 3 asset classes: Equities, Real estate and commodities (gold and bitcoin). Real estate is hard to execute and not scalable at all. Gold, can't be held outside an IRA. So, what does that leave? just Equities and Bitcoin. and anyone that wants any diversification is going to need some bitcoin. one by one sooner or later, everyone is going to come to this conclusion, it's just a matter of time. the future will be one where a 60/40 portfolio is not 60 stock/40 bonds but 60 stock/40 bitcoin. Bitcoin isn't attractive. On the titanic, do you think, anyone wants to get onto a rickety row boat with no seaworthiness whatsoever? While the music is still playing and party is going, no one gets on board. But, when it becomes clear that the titanic is sinking, everyone's rushing to get onboard. and when Fiat sinks, there's really only a few liferafs: equities, real estate, gold and bitcoin.
- nradov 4y ago
  Nah. Except for a tiny minority of true believers, Bitcoin is just a trading vehicle. The line goes up or down. Traders win or lose. Faith in fiat currency or lack thereof doesn't enter into it. Don't believe the hype. To the extent there is any real value it's primarily a means for wealthy Chinese to evade currency controls.
jc_811 4y ago
Centralized exchanges are completely unable to exist in the original vision of Satoshi. It's literally in the 2nd sentence of the original white paper: "...but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network" Using a centralized exchange ruins the peer-to-peer aspect and centralizes the transactions. Unless I'm missing something?
- hackinthebochs 4y ago
  That line refers to the mechanism to prevent double spending. If the network needed a centralized controller to assign an ordering to transactions and ensure consistency, that would run afoul of Satoshi's vision. But centralized exchanges are merely users of the base network just like an individual broadcasting transactions themselves. They depend on network consensus just like everyone else.

cowtools 4y ago

real jobs? Also, I don't think that the main proposition of cryptocurrency is that you don't need a centralized exchange. If you want to exchange fiat for cryptocurrency via the credit card or bank transfer, you need a trusted peer who can accept those forms of payment- whether that's a business or an individual. The centralization and insecurity of exchanges is due to their weakest link- the centralization and insecurity of the fiat system.

bluelightning2k 4y ago
Yeah I agree. That was kind of my point also -- the "decentralized" block-chain is pretty reliant on centralized exchanges. Real jobs is an interesting one. To the individuals yes they are real. To the economy there is no value creation and therefore the work done by these companies is just ultimately burning investor dollars & the planet in a lose:lose situation (as with everything crypto related).
- birracerveza 4y ago
  > the "decentralized" block-chain is pretty reliant on centralized exchanges. ...for now
chrisseaton 4y ago
> real jobs? If someone’s paying you then it’s a real job.

SilasX 4y ago

The main purpose of cash (aside from drug empires) is that you don’t need a centralized service to make transactions. Then all those banks and wire services popped up for cases where physical cash doesn’t work.

lolinder 4y ago

I'm as much of a crypto skeptic as the next guy, and there are plenty of decentralization failures in crypto, but you can't have "all these centralized exchanges". The fact that there are so many suggests something worked. I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.

2muchcoffeeman 4y ago
>As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized. I once asked a friend who had signed up to some crypto exchange "Do they just give you your keys when you sign up?". They replied, "What keys?" Eventually they found it. But it's not like they educate the user.
- birracerveza 4y ago
  The cool thing is that you can use a centralized exchange and not even know about what keys are, or use the network as it is intended and not rely on a centralized entity. What's bad about having more options?
  - 2muchcoffeeman 4y ago
    This is bad because who ever controls the keys controls the coins. So really for all these clueless users, the exchange owns all the coins and you can’t prove otherwise. And they don’t bother educating the user. Or suggesting best practice. That’s not in the users favour.
hnthrow1010 4y ago
>I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized. Can't you see this defeats the whole purpose though? By this logic, traditional banks are also decentralized because you can also take your money out and go to a different bank. The word "decentralized" has no meaning in crypto parlance, it means whatever the speaker wants it to mean at any given time. And at least banks are FDIC insured, when a crypto exchange loses all your money then you can't really pick up your keys again because everything is just gone.

Veen 4y ago

The main benefit of exchanges is that they generate market liquidity. It's certainly possible to trade crypto without an exchange, but it's much more difficult to find buyers and sellers. I suspect that something akin to an exchange would always come about when there are lots of people who want to trade conveniently.

throw8383833jj 4y ago

i know here on hacker news we tend to see everything from the technical perspective and that means bitcoin isn't very interesting. But, try and see things from a financial perspective. the value proposition of crypto has nothing to with decentralization. Bitcoin isn't about Bitcoin. The reason bitcoin is valuable has more to do with what's happening with governments and fiat currencies than anything about crypto or bitcoin. Ask anyone, why they got into bitcoin, ask any company that got into holding bitcoin instead of cash: they'll tell you: It basically boils down to "I lost faith in fiat". There's been a huge 50 year bond bubble brewing and 100 year government bubble brewing where govt uses larger and larger amounts of GDP with ever larger debts. The explosion of debt is insane. Ask any financial professional, and they'll tell you with all that leverage in the system, there absolutely WILL be a deleveraging. The govts of the world will NOT be able to meet all their obligations. They can't raise taxes and they can't cut spending. That means, they must default on their currency (this is basically just a huge huge tax on anyone who's holding cash or bonds, even if inflation only stays at 10%, that 100K tax per year on anyone holding a million dollars). And when the Dollar and all the other fiats of the world go bust, you're only going to want to hold 3 asset classes: Equities, Real estate and commodities (gold and bitcoin). Real estate is hard to execute and not scalable at all. Gold, can't be held outside an IRA. So, what does that leave? just Equities and Bitcoin. and anyone that wants any diversification is going to need some bitcoin. one by one sooner or later, everyone is going to come to this conclusion, it's just a matter of time. the future will be one where a 60/40 portfolio is not 60 stock/40 bonds but 60 stock/40 bitcoin. Bitcoin isn't attractive. On the titanic, do you think, anyone wants to get onto a rickety row boat with no seaworthiness whatsoever? While the music is still playing and party is going, no one gets on board. But, when it becomes clear that the titanic is sinking, everyone's rushing to get onboard. and when Fiat sinks, there's really only a few liferafs: equities, real estate, gold and bitcoin.

nradov 4y ago
Nah. Except for a tiny minority of true believers, Bitcoin is just a trading vehicle. The line goes up or down. Traders win or lose. Faith in fiat currency or lack thereof doesn't enter into it. Don't believe the hype. To the extent there is any real value it's primarily a means for wealthy Chinese to evade currency controls.

jc_811 4y ago

Centralized exchanges are completely unable to exist in the original vision of Satoshi. It's literally in the 2nd sentence of the original white paper: "...but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using a peer-to-peer network" Using a centralized exchange ruins the peer-to-peer aspect and centralizes the transactions. Unless I'm missing something?

hackinthebochs 4y ago
That line refers to the mechanism to prevent double spending. If the network needed a centralized controller to assign an ordering to transactions and ensure consistency, that would run afoul of Satoshi's vision. But centralized exchanges are merely users of the base network just like an individual broadcasting transactions themselves. They depend on network consensus just like everyone else.