According to CZ Zhao, founder, and CEO at Binance, the decentralization issue is based more on a sliding scale than black and white reality. While industry leaders argue for divestment, they continue to pursue monopolies on their cryptocurrency exchanges.
Like so many other things in modern society, a gradient scale puts decentralization, or the absence of a third-party mediator, in a murky grey area. At this point, most people should be fairly comfortable with a centralized monopoly, given finances generally. But monopolies on exchanges have new competition, like the recently launched BQT exchange.
Blockchain proponents are probably less likely than the average person to accept this status quo, especially when it comes to their money. Even more so when it is a premise on which the money was created.
Solid argument
CZ, however, has an interesting perspective on the issue. He focuses on three topics: freedom, security, and ease-of-use.
Regarding security, CZ is strongly in the camp that with the tools available today, including cold storage wallets, private keys, and encryption, most people should be able to manage security independently of a centralized party.
Central banks and exchanges, however, maintain security through early safeguards like KYC and AML. CZ believes this might be the best option for some.
The Binance CEO also notes that ease of use is often negatively affected by increased security. The more security you have, the harder it is to access and transact in cryptocurrency. This is a true statement, both at the individual and exchange levels.
Finally, CZ states that when it comes to freedom, a decentralized exchange is a clear winner.
His conclusion is right on the fence. His conclusion, from a blog post on Binance.com, is neutral.
“Today, our world is on the more centralized side with some governments having too much power, and they control everything from what you can say to how you can spend your money. That’s why many people demand more decentralization, and why cryptocurrency is popular.
Let’s work to increase the freedom of money while optimizing both the ease-of-use and security as well.”
Ongoing Binance monopoly
Nobody can forget, though, that Binance is the largest cryptocurrency exchange in the world. It trades every cryptocurrency pair imaginable on a wide range of platforms and opportunities. Also, it has a trading volume of over $1.8 billion USD.
The exchange is down 22 percent at the moment, possibly due to recent announcements that it will stop supporting United States trading as of September, 2019. Despite this news, Binance also recently expanded into Singapore. There is little risk that the exchange will see much long term loss.
Additionally, Binance has repeatedly maintained profitability, even during the 2018 bear market. CZ should be able to continue handing out Teslas or whatever he wants to do with his spare change.
The rest of us, however, need to tread with caution. CZ stated earlier in 2019 that the best protection against hacks is to “move to DEX.”
Karma overtook the CEO shortly thereafter. Binance suffered a 7,000 BTC, or $40 million loss on May 7, 2019, attack.
New Options
The good news is, other options are available. Binance may want to be the Wells Fargo of cryptocurrency, but investors have choices.
Recently launched exchange, BQT, offers a secure, P2P trading environment with user-friendly features, BQT is a great choice for anyone: new investors, fiat expatriates, and savvy cryptocurrency investors.
The platform provides a plethora of attractive features. Escrow service, hedge transactions, and wallet to wallet transactions are all existing or upcoming service offerings.
However, it also provides a social aspect. This includes social interactions, including P2P trades, a robust rating system, and easily accessible analytics and reporting.
Finally, and best of all, BQT is uniquely cognizant of the importance of many competitors in the crypto exchange ecosystem. Recognizing that this is a critical factor in maintaining a decentralized vision and foundation, BQT is committed to collaborative peer interactions.
Through transparency and a positive, welcoming approach to the furthering of the entire cryptocurrency community, BQT is clearing a path that will ultimately lead away from monopolization and secrecy, and toward a constructive, effective exchange network that is beneficial to all.