Binance CEO Changpeng Zhao (CZ) posted an article on Binance’s official website about his thoughts on decentralization and centralization. Currently, we often hear about decentralization, since the creation of the blockchain and cryptocurrencies. “Decentralization” is becoming a commonly used word in the crypto-sphere. This term means that power is not concentrated in the hands of a single authority. Applied to the crypto field, it thus implies the absence of control of the currency by a financial institution. CZ describes what he thinks is true decentralization.
Decentralization has many aspects
The new article published on Binance’s website shows CZ’s perspective on decentralization. The CEO of the largest cryptocurrency exchange platform was very clear in his remarks. He sees decentralization as a means to an end and not the end itself. He further clarifies that many people will not agree with him because their point of view is different.
CZ said the first thing to understand is that decentralization is not binary, nor is it one-dimensional. It has many aspects. He adds that each of these aspects is a gradient scale and not just black and white.
CZ uses the expression “not your keys, not your coins” to illustrate his point. According to him, many believe that keeping their private keys is a form of decentralization. In this case, TrustWallet would be considered decentralized and Binance centralized.
Several examples to illustrate these different aspects
In the article, the CEO of Binance uses the example of a common criticism about Bitcoin. It concerns bitcoin mining which is too centralized due to the 2 or 3 main mining pools controlling more than 51% of the hashing power. CZ points out that this statement is valid. This is an argument often used in favor of proof-of-stake blockchains.
He also mentions the examples of Ethereum and Vitalik, himself and the BNB chain, and Bitcoin and the addresses holding the majority of the coins. All these examples have demonstrated the different aspects of decentralization. According to CZ, people want the freedom to transact securely, easily and at low fees. Decentralization is therefore a means of achieving this objective. But it takes time and requires the collaboration and trust of different groups.
Finally, he adds that centralized exchanges serve as a bridge between centralized and decentralized systems. Furthermore, CZ promised to continue to defend freedom and security.
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