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Are Centralized Exchanges the New Big Banks?

19 December 2019 10:46, UTC
Are Centralized Exchanges the New Big Banks?
By Hans Koning

Twitter; where would we be without it! Last week DigiByte’s founder Jared TATE took to twitter with some harsh words targeting centralized cryptocurrency exchanges and specifically to call out Binance and TRON. Jared went on the record saying that Binance and Tron’s founder, Justin Sun, were “crooks.” In his view they were operating on borrowed time.

It didn’t take long before a response came — by Poloniex. They decided to unilaterally delist Digibyte (DGB) from its exchange entirely.

In short, Jared says exchanges are distorting the market with their greed and corruption, and that this is against Satoshi Nakamoto’s original vision.

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I know Jared, speak to him, and most of the times totally agree with him. Not because he is the founder of DigiByte, but simply because he and I – and of course millions more – subscribe to the same believe, and adhere to the same principles of true decentralization.

19.02.2019  |   in Guest posts
When following the debate on twitter, it all of a sudden it dawned on me. The traditional banks and the classic finance sector isn’t the “enemy”, isn’t the biggest roadblock, isn’t the greatest threat to decentralization; some of the centralized exchanges are!

It is so easy to think of the banks as “the evil”, but they are predominantly ignorant. Most of the banks are conservative, and prefer things to stay the way they are. This “Ledgers ‘R Us” approach of banks has worked for centuries, and that is not something they can or want to give up. Just keep giving us grateful and ignorant customers the illusion of control, hand out a few beads every now and again, just enough to keep us happy, and it is business as always.

Centralized exchanges itself do not — by definition — have to be bad, or totally against the core principles of blockchain. Principles like transparency, inclusiveness, trust and integrity can still be respected in a centralized environment, and they can exist alongside decentralized exchanges. However… they must ensure us consumers that they observe, acknowledge and respect those principles. There cannot be hidden agendas, whitewashing, conflicts of interest or preferential treatment of certain coins. That is simply not acceptable, and should always and immediately be called out.

Jared doing so can only be applauded and anyone who even remotely likes blockchain should support him up to the hilt. So the #StandWithDigiByte hashtag on twitter is the only and proper response, and of course an upright community like the DigiByte community would do so. It makes me, Rudy BOUWMAN and Rutger KRIJNEN extremely happy and proud to lead the DigiByte Foundation.

We do need to get some clarity, perhaps better said objectivity, or nuance in the debate though. Being centralized — there is nothing wrong with doing business and making money. Microsoft in the 1990s bundled an operating system together with their office applications and their then famous browser. That led to an acceleration of computer literacy and catalyzed mass adaptation, not only in the workspace, but also at people’s homes. Without it we would not even have this internet, access to computers 24/7, and we would not be having a cross-border global and interactive debate like we do now. But, they misused their position, and were eventually forced to stop doing so.

Extrapolating that to centralized exchanges: if we did not have them, would the industry as a whole have made as much traction, acceptance and progress as we have today? I seriously doubt it. The centralized exchanges have propelled things forward — there is no doubt in my mind about that — but that by no means gives these exchanges a carte blanche to do whatever they feel like or see fit to make money. And that especially applies to those who seem to operate from a moral vacuum. The response from Poloniex to delist DGB is nothing short of pathetic. The exchange should have reached out, engage in a debate, and not act as a “tit for tat” bully.

05.02.2019  |   in Guest posts
We need to make sure that pursuing true decentralization should always be on our minds, and is an ongoing pursuit. I also believe we should add some nuance to that every now and again.
Pursuing true decentralization should not turn us in bitcoin maximalists. There are always – no pun intended – two sides to the coin.


About the author:

Hans Koning is the Chairman of the DigiByte Foundation. He has been in the forefront of nascent and emerging technologies for over 25 years. Either as an advisor, investor, mentor, coach, lecturer, or simply as an observer, ever since the birth of the internet, he has been committed to guide new technologies in finding its way into society. The goal of the DigiBiyte Foundation is to protect and promote the true principles of decentralization, and empower DigiByte and its community to further establish and maintain a sustainable decentralized world.



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