Dec 19, 2018 03:30 UTC
Jan 31, 2019 at 08:01 UTC
Is Bitcoin Really Decentralized?
If you read any article, blog post or even a book about Bitcoin, you will surely encounter a word “decentralized” sooner or later.
Decentralization is one of the key reasons that cryptocurrency has pulled in such a significant number of committed users in any case.
Still, even if it was quite evident in the early days of bitcoin, a lot of people hesitate to say that “Yes, Bitcoin is truly and completely decentralized?”
Traditional money is regulated by the government and consequently easily influenced by outflows and devaluation. Banks hold the assets of the customers and when bank goes bankrupt, all the money is just buried with it all along.
So cryptocurrency was invented to wreck the dependance from both previously mentioned establishments to guarantee that the value of people’s assets won’t drop since government chose to pay its national debt by printing more money.
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Exchanges – The Gatekeepers
At this moment, the majority of the best exchanges for cryptocurrencies are centralized. They have a couple of investors who hold the lion’s share of control, and with this comes the ability to censor the stream of assets.
Decentralized exchanges are on their way, however the majority of the currency decentralized solutions allow only crypto-to-crypto exchanging facility, which is yet limited in its use.
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So, Is Bitcoin’s Claim of Decentralization a Lie?
Despite the involvement of the exchanges, Yes, Bitcoin is still decentralized.
The crucial distinction between the system of cryptocurrency and fiat currency is that, when using crypto, you have the privilege not to hand your hard earned money to third parties, while in case of traditional money, you just can’t maintain that strategic distance from that.
Additionally if you use fiat currency, your life is traced by central authority and you can’t get unnoticed.
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Talking About Bitcoin (And Other Cryptocurrencies)
Sure, numerous people use exchanges and several third party services, because it is easier to deal with their virtual currency that way.
But, the thing is that they can manage their crypto funds straightforwardly, while still maintaining the anonymity and privacy.
In the one hand, a user of fiat is always compelled to use centralized services, where Bitcoin user is never compelled to do so on the other. Bitcoin users use top cryptocurrency exchanges and other services for their own convenience, but they are never forced for that.
System of fiat money is centralized, and its confirmation of being centralized is that only government controls the money and has the complete right to issue it.
In case you try to invent your own money, you will be rebuffed by the law.
But, it’s not possible for entity to invent your own virtual currency. It will cost as much as people are all ready to pay for it. At present, we can see the new cryptocurrencies every day.
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Cryptocurrency like Bitcoin evacuates an entire layer of banking bureaucracy, giving you financial freedom.
Indeed, even electronic payment gateways can’t give this freedom, for example, PayPal can freeze your account whenever it has any doubts.
It is not possible for anyone to ever freeze your bitcoin wallet or forbid you the access to it.
While using cryptocurrency, you don’t leave any personal information.
You are the only one who has the access to your funds.
Not any entity, not the exchange… just YOU!
Thus, answering the question “Is Bitcoin Really Decentralized?”, we will nail colors to the mast: “Yes, It is Decentralized.”
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