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>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 pi

>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.

pcthrowaway 4y ago
Not exactly the same, because with the US Dollar, every bank can be ordered to freeze your assets. This may be considered a feature, but the same is true for the Ruble, or the Real. Having assets on the blockchain means you self-custody them in a more portable way (similar to cash), while still having them in a digital form.
- hnthrow1010 4y ago
  It is the same. Crypto exchanges can also freeze your assets when you hold them in that exchange. And actually this is a good thing, the accounts of fraudsters, thieves and scammers should absolutely be frozen and confiscated. Crypto companies are trying to promote this idea that because they've sprinkled some crypto magic on their banking product, they don't have to follow laws, and by doing this all the fraud will just all suddenly disappear for no clear reason. That overwhelmingly isn't true. Don't let them get away with this. "Self-custody" in crypto is also a lie, there's no such thing. All activity on a blockchain is completely dependent on the miners to run the network.
  - rvnx 4y ago
    Instead of a court, in crypto, the operators of a coin decide on what happens to your funds. They can freeze your assets to make their assets seem more valuable, or they can agree to create an infinite amount of currency (ex: dogecoin)
hackinthebochs 4y ago
>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 point isn't that centralized exchanges are decentralized, but that the network is decentralized in spite of the existence of centralized exchanges. Crypto provides financial democratization by way of an open permissionless financial network. Large entities can't collude to lock in customers or lock out competition. Centralized exchanges offer convenience over the base network and so they see a lot of use. But your freedom to transact with the network can't be taken away by centralized players. There is no analogous "base network" when it comes to bank transactions.
- hnthrow1010 4y ago
  But that's also false. In practice the network isn't decentralized at all. This was very obviously the case since the very first bitcoin mining pool formed in 2010. The advantages of re-centralizing are far too great, and the whales have a clear financial interest to put themselves in charge of the network, so that's what they do. Any system that gives you more power because you put more starting cash into it can't be described as "providing financial democratization", so that characterization is just wrong. It's also wrong that they can't take away your ability to transact, the miners absolutely have the ability to block your wallet or ignore your transactions. And I hope you can see the uselessness in creating a system that fits some vague definition of the word "decentralized" while nearly everyone who uses it just interacts with the centralized services on top of it, because maintaining the illusion of decentralization is so difficult and pointless that nobody actually bothers with it. Maybe it's "decentralized" if you're a whale and you want to capture large portions of the market with fraud without anyone being able to stop you. For everyone else, it's just not. The "base network" here is just for show and marketing purposes, it adds nothing of value to any real legitimate activity.
  - hackinthebochs 4y ago
    I don't see a substantive criticism here. I agree that the term decentralized is a misnomer, if only because the term is so vague. Democratization is the term I use to describe crypto. The question is whether powerful entities can interfere with the expected behavior of the network against the will of users. I don't see that this is the case. Sure, miners are in a position to ignore transactions, but doing so would require a high level of coordination that doesn't go against the ideal of "democratization". Yes, if everyone is against you, you're screwed either way. But crypto raises the level of coordination required for such an act to the point of implausibility. Besides, if such a coordinated attack against an individual was in progress, we would likely see hashrate reorganize to short-circuit the attack. This is democratization.

pcthrowaway 4y ago

Not exactly the same, because with the US Dollar, every bank can be ordered to freeze your assets. This may be considered a feature, but the same is true for the Ruble, or the Real. Having assets on the blockchain means you self-custody them in a more portable way (similar to cash), while still having them in a digital form.

hnthrow1010 4y ago
It is the same. Crypto exchanges can also freeze your assets when you hold them in that exchange. And actually this is a good thing, the accounts of fraudsters, thieves and scammers should absolutely be frozen and confiscated. Crypto companies are trying to promote this idea that because they've sprinkled some crypto magic on their banking product, they don't have to follow laws, and by doing this all the fraud will just all suddenly disappear for no clear reason. That overwhelmingly isn't true. Don't let them get away with this. "Self-custody" in crypto is also a lie, there's no such thing. All activity on a blockchain is completely dependent on the miners to run the network.
- rvnx 4y ago
  Instead of a court, in crypto, the operators of a coin decide on what happens to your funds. They can freeze your assets to make their assets seem more valuable, or they can agree to create an infinite amount of currency (ex: dogecoin)

hackinthebochs 4y ago

>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 point isn't that centralized exchanges are decentralized, but that the network is decentralized in spite of the existence of centralized exchanges. Crypto provides financial democratization by way of an open permissionless financial network. Large entities can't collude to lock in customers or lock out competition. Centralized exchanges offer convenience over the base network and so they see a lot of use. But your freedom to transact with the network can't be taken away by centralized players. There is no analogous "base network" when it comes to bank transactions.

hnthrow1010 4y ago
But that's also false. In practice the network isn't decentralized at all. This was very obviously the case since the very first bitcoin mining pool formed in 2010. The advantages of re-centralizing are far too great, and the whales have a clear financial interest to put themselves in charge of the network, so that's what they do. Any system that gives you more power because you put more starting cash into it can't be described as "providing financial democratization", so that characterization is just wrong. It's also wrong that they can't take away your ability to transact, the miners absolutely have the ability to block your wallet or ignore your transactions. And I hope you can see the uselessness in creating a system that fits some vague definition of the word "decentralized" while nearly everyone who uses it just interacts with the centralized services on top of it, because maintaining the illusion of decentralization is so difficult and pointless that nobody actually bothers with it. Maybe it's "decentralized" if you're a whale and you want to capture large portions of the market with fraud without anyone being able to stop you. For everyone else, it's just not. The "base network" here is just for show and marketing purposes, it adds nothing of value to any real legitimate activity.
- hackinthebochs 4y ago
  I don't see a substantive criticism here. I agree that the term decentralized is a misnomer, if only because the term is so vague. Democratization is the term I use to describe crypto. The question is whether powerful entities can interfere with the expected behavior of the network against the will of users. I don't see that this is the case. Sure, miners are in a position to ignore transactions, but doing so would require a high level of coordination that doesn't go against the ideal of "democratization". Yes, if everyone is against you, you're screwed either way. But crypto raises the level of coordination required for such an act to the point of implausibility. Besides, if such a coordinated attack against an individual was in progress, we would likely see hashrate reorganize to short-circuit the attack. This is democratization.