How Decentralized Are Cryptocurrencies?

Main concerns

  • It is too hard for the average user to support the network
  • It’s expensive and time consuming for decentralization
  • The alternatives slow down the blockchain

Ethereum 2.0

The main problem

With many people having fractions of an Ethereum rather than the full 32 ETH, it’s only sensible that pools will arise. This creates vast trust issues; let’s take Coinbase, for example. A pool would allow the masses to contribute, splitting both the costs and rewards of staking all managed by the pool (Coinbase for this example). With Coinbase being the biggest cryptocurrency exchange, according to investopedia.com, they would have massive control over the network. While although it is unlikely such a big company would defy trust like that, it is no different in believing in governments.

Bitcoin

The Main problem

According to Cornell’s study, the top 4 mining entities control more than 50% of hash rates, which is enough to blast a crypto nerd off their chair! While it has been disputed the exact number, it is a scary thought to see the truth of just how decentralized the top dog currencies are! Due to ASIC mining, with major companies like BitMain producing these highly niche chips, they keep their technology for themselves for a little while before making a better one and releasing old ones to the general public. Believe it or not, it’s completely legal too! With bitcoin not having a government, we can’t do anything about it, and if we could, the companies could claim it was “testing”.

What We Can Do

We decide what we use! Money is a tool to store value, and we have options! The connotation that we are locked into what our government gives us is outdated now; we are at a technological point where we can use anything. Nothing backs the fiat cash we all use today, just our trust. The problem lies with the masses being unable to agree on a value. We NEED to revoke the power of banking&currencies from the government; it’s simply not necessary. In the current system, there is corruption, unhealthy/unregulated inflation, and it’s hard to carry cash.

Concluding Thoughts

There is no perfect currency, but as they improve, we must adapt. It has been established that nearly all government currencies suck, yet we haven’t flocked to the alternatives. There are thousands of cryptocurrencies without the recognition deserved.

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