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Changpeng Zhao, founder and CEO of Binance, the largest cryptocurrency exchange by traded volume, pondered the importance of decentralization and its relationship to security and freedom. Zhao stated that there are several aspects to decentralization and that this is part of a gradient scale, explaining the different ways even Bitcoin can be seen as centralized.
Much has been said about the benefits decentralization brings to cryptocurrency projects and how it sets some initiatives apart from others. Changpeng Zhao, CEO of Binance, reflected on the importance of decentralization and how this characteristic must not be the goal, but a tool to achieve several goals related to a cryptocurrency project.
In a blog post published on October 9, Zhao explained that decentralization was not absolute and that there are several key aspects to it. He explained:
Each aspect is a gradient scale, not just black and white. It is also important to remember that decentralization is a means to an end, not the end in itself. The goal is freedom, security and ease of use.
According to Zhao, each of these aspects can make different projects (even Bitcoin) seem centralized, depending on what is considered.
Similarly, Zhao noted the importance that centralized exchanges (CEXs) still have. According to Zhao, most people still use centralized exchanges as a way to keep their cryptocurrency safe, as most people are still unable to keep their money safe with the tools available today. He declared:
Therefore, CEXs are more popular today. Centralized exchanges provide an incremental step for users to access crypto and can act as a bridge between centralized and decentralized systems.
Zhao makes these statements on the heels of a major exploit where an unknown attacker was able to take control of 2 million BNB, prompting validators to halt the Binance Smart Chain blockchain to patch the hack. The action was heavily criticized due to the speed with which the validators of the network coordinated to halt the chain to avoid further losses.
However, Zhao declares himself a believer in decentralization, and says that the exchange will continue to invest in the development of solutions that allow security and freedom to go hand in hand in the future.
What do you think of Changpeng Zhao’s vision of decentralization? Tell us in the comments section below.
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