Bitcoin Forum

As crypto hits the mainstream, more businesses and companies are joining the game. We've seen innovations from NFTs to security tokens, and stablecoins. Most of the coins being traded on the market have smart contract functionalities, making them multi-purpose platforms for real world use. While all of this sounds nice, there's been an increasing rate of centralized exchange dominance over the past years. Not only that, but alternative cryptocurrencies (altcoins) have been prioritizing convenience on top of decentralization in order to provide people with lower fees and blazing-fast transaction confirmation times.

Most recently, Lightning Labs announced the creation of a new stablecoin that will operate in its "Taro" platform. If companies start to embrace stablecoins on top of traditional cryptocurrencies, then the whole industry will become heavily centralized. This should be a cause of concern, as a full government crackdown (or ban) could mark the end of crypto's prominence in the mainstream world.

Do you think ever-increasing centralization is a cause of concern? What would be the impact of tightening regulations over the entire crypto/Blockchain space? Will it still be able to survive? Your input will be greatly appreciated. Thanks in advance. :)

Let's set aside stable coins for the meantime and focus on the fact that many chains today rely on centralized infrastructures to keep them running. Even most of the Ethereum nodes are hosted on Amazon Web Service. Validator nodes have become less like the Binance smart chain with only 21. Let's also add that projects built on top of these chains can be paused when the devs find it necessary. So is crypto becoming centralized? It's a yes for me.

I'm considering the fact that the regulations will help to stop non-profitable investments, scams, and fake projects. I'm in favor to have such regulations for this it helps people to put an investment as they can assure that their fund is safe...well, this is a positive side

But if we talk about the negative impact on the user and investor's ends, these things we possibly get,
 * taxes
 * high fees
 * controlled market price
 * they can freeze our accounts and seize our money
 

I also noticed the same. Unfortunately, if someone wants to operate in the open mainstream and in the world of cryptocurrencies, he must undergo regulation and require KYC verification to function legally. However, the cryptocurrency market is constantly evolving, so I think many companies will only operate in the cryptocurrency market and they will avoid regulation and operate anonymously. I think that everyone will find something good for themselves. It's just that everyone will take a piece of the cake for themselves, but it looks like regulated companies are taking more and more of it.

Some factors may seems to be look of crypto as a centralised one.But it’s not a centralised one.Mainly price of crypto currency,includes the bitcoin.When the demand in the market was increased to the bitcoin,the price of bitcoin automatically increased.Like the same way,the decrease in the price of bitcoin was happened with the help of the crypto currency.Ethereum is centralised crypto.

Likely.

But it's part of the growth of the market for being decentralized, there could be huge companies that can come in and make their own monopoly. Sad but true and we have to embrace this reality.

And the thing is that, it's becoming a divided side like many cryptos are only for trading and there goes the others that are mainly used for transactions.

Still 50/50 in my opinion, centralization has being a thing right now, and although it goes against the basic of crypto, but still it has somewhat grow a bit that those involved doesn't care about the so called no authority and distributed power amongst validators, nodes, project owners or developers. So I guess it is not bad after all as we are still moving forward and making good progress.

Yes it is true, crypto is becaming moreover Centerlized with each day .it is happening due to the government what i fell ,all they want is to examine us , well in Developing country like India the tax amount is rising 30% tax and the major issue is government is not happy with the Tax percentage and they wanted to increase it to 50% i means seriously all they wanted us to give tax but their are many good exchanges like Kucoin where their is no need of kyc for Depositing and withdrawaling and their is also one good news Polka Bridge is Announcing a decentralized P2P that's really good and it will live from July so let's hope for best

We want adoption right? And in order for that to happen it needs to be regulated so other big companies can freely adopt and do business here as well, this is beyond our control because the government sees the threat and they can’t easily allow this platform to freely work within their territory without regulations. We are slowly getting there, so be ready but still they can just regulate but not to fully control the market, more probably they just want to collect taxes here.

Well since crypto was pretty much created to combat centralization so if you partake in centralized crypto, using exchanges as your wallet, etc it's your own fault.  Evolution leads to businesses trying to profit off of it but it's a create your own adventure, don't partake and stick to the origination of what crypto is here for.

Unfortunately yes, we are slowly getting there, let’s just hope that decentralized platform will stay and can still compete with the centralized platform because if not then crypto might collapse. If many big companies will adopt, regulation is a must to some government, and we cannot escape from that since government still have the control over their people and companies.

We have to look on the bright side. Keeping in touch in the centralization won't really hurt at all. During a time when crypto is about pure anonymity and even crypto-related companies are private, where do people go for help in an event of a scam? The authorities have even no clues where to start if they are investigating these scams. If only people are wise and scams are not that big an issue before, the government won't be bothered to put centralization on crypto.

Before, crypto exchanges don't have KYC but to protect their users, they are now obliged to make it a mandatory requirement which turned out good overall.

I'm against a pure centralization but to fully enjoy the advantages of crypto, no choice but to hug the centralized part. What choice do we have in the first place?

There are always some negative impact if we were to embrace centralization from cryptocurrencies. But to be honest, centralization goes against the vision of what Satoshi imagined as it somehow defeats the purpose of creating a decentralized currency.

The question is, is centralization essential in order to combat the aforementioned issues of scams, hacks, etc. ? I do not think so. While there may be scams and fake projects, a diligent person may be able to overcome it by being responsible. Though one thing that he cannot control are the hacking of exchanges, but this can be resolved if you were to move your coins to your respective hardware wallet.

Though centralization of some coins may sound feasible, this would disrupt the balance and vision of having a decentralized currency which is free from any control.

Basically most of cryptos were totally centralized. I think that crypto can't become truly decentralized and only some crypto like bitcoin that was truly decentralized. The rest was totally centralized caused by it was controlled by the regulators, developers or using a few nodes that make it can be controlled by a few entities that can create collusion between one to the another entities.
It's clear if crypto is slowly moving to the centralization.

Yes, it is, but I think it is a necessary evil. Just look at SOL for example, it is popular, yet centralised.

To scale effectively some decentralisation needs to be forgone. I don't necessarily see that as a problem as long as the users of the blockchains are informed and agree to use the protocol as is.

Bitcoin is still going to be the most decentralised coin for a long time, which is why alts may not be able to displace BTC on a market cap basis for a while.

So how can you be satisfied? Such a change, I think, is reasonable and necessary when we have to admit that the interest from large companies has impacted confidence in the success of the market. This school is more. And on top of the issue of stablecoins affecting the centralization of the market, it's funny how the rise of stablecoins will dominate the issue of control. Positive thinking on them creating stablecoins for centralization star? I haven't seen so much popularity so far. Of course, every major platform provides fixed assets to create stables that help ensure people's trust, so it's not empty, but today we need more attention from large corporations to the industry, so you have reason to be afraid.

Some who dont like centralized will slowly get away from blockchain. But centralization only restrict only those scammers and law abiding citizen, whereas they cant completely do their scamming activity. It doesnt mean cryptocurrency industry will tremble in chaos or panic, but only those who are doing malicious activity.

It seems true. The regulation will make crypto to be even more centralized than before. That being said that if crypto is not so decentralized right now. I must also remind you that when you are seeing what happened with so many second layer blockchain and you will aware if these blockchains have less and less nodes. Just like some blockchains that exist in the market i.e BSC, polygon and many more. These days people are also preffering to use POS rather than POW which was making the blockchain to be truly centralized due to the energy consumption.
I think that if you are also aware about this too about how centralized the majority of blockchains these days.

Maybe or not in the future no one knows and nothing is impossible in this world and technology is constantly evolving.
and for bitcoin, the whole idea behind bitcoin is to create a decentralized currency, one that is free from governments and banks.
and if someone and anyone somehow manages to centralize it, it means that bitcoin has failed to achieve its original purpose and it will become worthless.

The big concern now is free from scams and projects that do not live up to expectations, I still believe in decentralization but to many bad actors that are hard to trace or prosecute, many bad projects where developers only want the profit side, the industry adhere to centralization to protect investors and the community, there are sides that are decentralized and there are sides that are centralized, decentralization is something that can help adoption.

Yes, I believe that centralized stablecoins are not needed by the crypto industry. 

The basis of the crypto industry is the first cryptocurrency (Bitcoin).  All other alternative cryptocurrencies are essentially experimental laboratories for testing new cryptographic and financial technologies.  As testing progresses, the best of these technologies are incorporated into the Bitcoin code. 

Previously, on cryptocurrency exchanges, altcoins were traded exclusively in tandem with bitcoins. 

However, later stablecoins appeared (in particular, tether, usdt).  In my opinion, this is a step backwards. 

Cryptocurrency is an alternative to the modern financial system.  Bitcoin is a replacement for the US dollar. 

Most stablecoins are centralized.  In addition, they psychologically prepare people for the adoption of Central Bank Digital Currencies (CBDCs).

Centralized services tend to provide convenience, and most the people don't ready/want to sacrifice it to gather sovereignty.

It seems that is how the world works. We live in a centralized figure, so to obliterate any centralization is unlikely, in some cases, it worse though.

The things is, cryptocurrency that truly favor decentralization wouldn't affected to much about any centralization, as long the people who built it and with the community protecting it, centralization wouldn't do any significant harm, systematically.

               While centralization may be a bad thing in the eyes of the majority, it doesn't mean that it is indeed bad. There is no such thing as complete freedom in this world and thus some rules should be followed. Good thing about this though is that it enables this industry to thrive without being targeted im a horrific way compared to when everyone was pushing complete privacy and decentralisation. Besides, there are still ways to go around the privacy problems since not wvery coin out there is following centralisation. Some good coins also promote decentralisation and are available for use any time. Point is, coexistence needs centralisation at least to some extent. If not, banks and governments will go crazy and may go all out in destroying the crypto industry.

I am not really sure if the centralization of the whole crypto currency space is really increasing in the last few years because i kinda have the opposite impression. I mean just look at that whole Defi topic i think projects that introduced this term and functionality to the crypto world were the main reason for the bullrun of 2020 and the first few months of 2021. Back then we saw platforms like Uniswap, pancakeswap and others becoming huge exchanges where most new tokens where launching and could be traded first. So in that regard i definitely think that the crypto space became more decentralized then it was in the years before 2020. Back then new projects had to pay huge listing fees in order to be listed on good exchanges which killed of quite a few good and promising projects.

It is undeniable that slowly crypto will have regulations in each country and this is what will make the cryptocurrency centralized even though in reality it is decentralized. For example, in my country (Indonesia), all data from the exchange must be forwarded to the authorized agency (BAPPEBTI). We only can hope that decentralized platforms will continue to exist to continue to support a better crypto space.

When I first learned about the cryptocurrency, I liked the decentralization in the blockchain the most, at first this word "decentralization" was the fundamental link in the development of the cryptocurrency, but today everyone is starting to forget about it and today we see the tendency of most countries to control the cryptocurrency, and there is no getting away from it.

With the rapid increase of Defi and NFT systems centered on decentralized systems, many altcoins will build systems with centralization and almost all altcoins also use centralized systems and all of them may not survive if the regulations given are very strict, making space narrow. so the movement will be more difficult but so far it is still not very visible the possibility in the next few years the regulation could change.

Crypto is fast going centralized and it's becoming worrysome although many projects, Exchange are doing this so as not to be put out of business, government are now slowly controlling some Crypto-currency related entity and gradually the decentralized qualities of crypto-currency is fading out.
I think if this continues in this manner the government would see that they can defeat crypto-currency and put away centralization, crypto-currency has gone main stream and it becoming a scare to them.

^ Probably because during ICO and IEO time there are too many people who have been scammed and now at least, they lowered the number of having been scammed. We easily to find out which is a scam or not, Centralization sometimes has an advantage but the true meaning of crypto and the decentralization will still remain as long as there is BTC that is created for decentralization and no one is behind it. Probably those projects that newly arrive will become a more specific target of centralization which is good and have an advantage for us those investors.

Regulations is next to being a centralized platform, we are slowly getting there and we cannot stop this process. The government can always regulate us and this is the reality but the good thing with cryptocurrency is that, anyone can have the access to this platform and the decentralized system will stay even if the government interfere, they can’t control Bitcoin and other altcoins, we should stick to that.

Agree.  If the government wants to crack down on cryptocurrencies as a unified and unified regulation can bring about centralization, but it cannot change the integrity of this space.  They will win to push the market down, but they won't be able to beat bitcoin and the infinite growth of cryptocurrencies.  Yes, I think - DEFI will solve the next problem of sovereignty.
And Yes - we need to support a flow of react/from elements that may be in the next provision for development.

The situation maybe worse than that, as you also explained earlier "the government can always regulate us". That is what has happened now but in some areas crypto can still be enjoyed centrally or not, as well as what needs to be underlined is that the government has not yet fully launched a centralized crypto jointly in all countries, and at this time just ordinary companies or crews without interference from any government. These are all a business assets.

Government can't change anything, sure they are doing their best to track everything like the US government offering money for some entity to break Monero's anonymity but we will just have to adjust to that. Centralization might come, but it's wont even change anything in crypto, and we have to accept that and live together with the government and central banks around and we will still thrive in this environment.

If you look at the entire space, majority of the users love to trade in centralized exchanges even though we have decentralized exchange and the volume in those exchanges says the general trend and it is like that from the start and now with regulations and other taxation rules in the horizon it is a cause of concern. I am certain we will survive that because once regulation kicks in and if some countries impose insane tax on cryptocurrency then they will start trading in decentralized exchanges and then the trend will start.

More and more entities are joining in the crypto but these entities are starting to make the crypto become centralized. So many blockchains are only having a few nodes which has been running by its collusions.
It seems like that if these days the majority of blockchains in the crypto industry have become truly centralized. So many tokens are also pegged with the centralized exchange sites as well.
These days the centralizations are still playing a lot in the crypto compared with the decentralization. So, i don't know whether calling crypto as truly decentralized is still relevant or not.

Theain purpose of Crypto was decentralization but there is some drawback and I think it's good for Crypto to be centralized. Hacking and stealing is more in Decentralized system because it's difficult to trace the stealer there. Axie Stealer still holding stolen money but no one can trace who did that.
Many countries looking to legalize the Crypto and add tax on crypto which is not possible in decentralization so they will go for centralized system and regret that the Future be of crypto is looking fully centralized.

Crypto is not becoming more centralized.

Investors/users/the public are embracing more centralized blockchain protocols and investments.

On the retail side they're choosing speed, price and less responsibility. The institutional side is choosing all that as well as being additionally motivated by threats of governmental oversight.

There are decentralized (or perhaps "less centralized") options to choose from, but they are nowhere near as popular (by MC and TVL) at this stage. Decentralized networks will always take longer to execute, and require much more personal responsibility and accountability on behalf of users. It has only taken a single, greedy mistake to transform a decentralized, crypto-libertarian into a CeFi statist.

Whether or not the original raisons d'etre for cryptocurrencies is ever fulfilled is, as yet, an open question. "We, the people" are the ones who will provide the answers, and those answers are increasingly "CeFi > DeFi".

Yes for me, very alarming especially the volume or market cap in cryptocurrency is slowly increasing also the number of people also using cryptocurrency is increasing too.
Common concerns here are the hacks, rugged projects some insiders,s or issues because it is centralized, and there is an entity that controls it.

Yes and no in some blockchain like smart chain the validator is only 21 i think is become more centralized but other chain still 51% attack proof

indeed many countries object to the decentralization system, because they cannot control it. on the other hand, even though they have not legalized cryptocurrencies, many countries have implemented tax rules, although it is still difficult to make complaints, for example the problem of asset theft. even though crypto is centralized, but at least it has a clear supply, which is better than fiat, which can print money continuously which eventually leads to higher inflation.

well, no wonder they tried to build a centralized system when decentralized systems became so popular. however, whatever system they make, people's views of cryptocurrency only focus on bitcoin, and bitcoin is a crypto that has a decentralized system. and I agree, they are trying to make a centralized system with the aim that they can control the movement of the economy in matters of taxes, fees, markets, and others.
however, the repercussions of this can be both good and bad. when people know that many cryptos have a centralized system, I think many people who used to hate crypto will come back, even new investors will come too. however, this all challenges the principle of crypto which has been decentralized from the start. it's just that, I think the decentralized system still survives because that's basically what crypto is, even when they make regulations of any kind. that won't let them rule out that bitcoin is the crypto at the top.

Mainstream attention and adoption is crypto does not change the algorithm of how blockchain works, aka does not equal to centralization. Saying so would be an oversimplification of the gradual interest growing in crypto. Is that not what majority of the folks here wanted long back? They are now seeing the prices of held crypto going up and they are happy about it.

If someone creates a new centralized currency system then it is the people's choice to invest in, it does not change bitcoin. People prefer speed and ease of use, so if they see a centralized system having better results, they will stick to it. In that way crypto will remain a niche sector. But we want more adoption into public, so this is a compromise that has happened, but it does not mean it is becoming centralized.

Full decentralization is more of a myth than a reality. Even decentralized services are essentially centralized, and they are subject to regulators, they block access to different jurisdictions. So what kind of decentralization can there be after that? The crypto industry is slowly coming to full centralization. More than 100 countries in the world have already adopted the necessary regulatory and tax laws to help the crypto industry. Now there is a trend to de-anonymize all transactions that exceed a certain limit. KYC and AML are everywhere, exchanges are cooperating with governments, Chainalysis has learned to track addresses and belonging to a certain geolocation and identity.

This is the future of the crypto industry, complete control and regulation.

no, because as long as there are coins like bitcoin, monero, and other coins that still use POW. centralization is just a complement in the crypto space. I don't think centralization is bad, because we still need it. without the help of a centralized system, crypto would not develop as rapidly as it is today.

The impact I feel the most is taxes. because the main purpose of regulation is tax. adoption drives regulation and eventually crypto will be controlled. in the future crypto will not truly become decentralized as regulation will govern the crypto space.


even though the regulations are getting stricter, crypto is still surviving. but what worries me is whether the hype will be the same as it is now?. crypto is noticed by the whole world today because of its decentralization. but if regulation could make crypto centralized, it would make the crypto space very different.

Why then can it be needed if bank system is faster, is widely adopted, is easier to use? If crypto becomes centralized it'll stop being an alternative to centralized bank system and will lose all advantages it has. CBDC is not crypto and would be just a little branch of fiat system. Crypto can be decentralized only, all it's sense is to be an alternative financial system where everyone can manage their money by own will.

I think it is a conflict of interest. In all respects, cryptocurrency is better than the old banking system, but because of the use of leverage and restrictions by governments and banks, cryptocurrency will try to be as similar as possible to banking, with the same centralization, regulation, and ability to impose sanctions on assets. I understand that the nature of cryptocurrency excludes all these methods that come from traditional finance, but an unregulated and decentralized cryptocurrency threatens this whole system, so they will try all kinds of methods to break and restrain it, centralizing and de-anonymizing crypto users as much as possible. Look at the latest trends: continuous bans, legislation on disclosure of information about crypto users, leaks of data from exchanges to governments, expansion of regulation and taxation. It's just like the banking sector.

Looks like we are heading towards that kind of future which is kinda different from what we are looking for because one of the financial freedom features is to have a privacy regarding transactions. We still have projects that continues providing it but due to some kind of trust matter they remained underrated and lack of popularity.

Yes, I understand that. And exactly those restrictions, regulations and attempts to centralize crypto show that crypto is a real possible alternative to traditional system. And traditional system doesn't want to lose control under entire financial situation. That's why it tries to restrict and to integrate and centralize all what it can: because centralized crypto has no sense and would fail. Crypto is not faster or easier than online banking, harder to pay than bank cards, etc. It's decentralization and independence is what giving it own advantages to develop, as a competitive alternative.

I heard news that stable coins will soon become centralized, every transaction that occurs from real money will be converted automatically to the supply amount, of course by being centralized it makes us more secure and not afraid when there are significant market fluctuations because stable coins are guaranteed .

BTC in my opinion now there are many big holders they can manipulate the market but still it is Decentralized and it mean that what you hold that you own and you are responsible for its future value but now whales are trying to control which is in current situation looking that they have done alot but for the future there no any chances for this Objection

Bitcoin is decentralized in nature and we can't deny that but we are talking about crypto in general where many of these new projects has already been controlled by whales, they are now manipulating the market trend, volume, and also the news. Maybe, for now, we can just say that crypto is still decentralized but sooner or later, as there is a massive growth of manipulations, this will change the system, and become centralized.
Objections are somehow useless, whales will take control of the market while investors will just ride the trend and hypes.

But, most of the hackers you’re talking about are being caught ::). We have seen news about several of them that were caught as of recent. So, I don’t really think that cryptocurrency covers them for doing such. Take for example the ones that hacked Twitter, it didn’t take long before they were all caught.

But, I do understand your concern. A lot of people always feel that there is the possibility of decentralized coins currency used for illicit activities and all manner of wrong doings on the dark web. So centralization might fix these. Although I don’t think that would even be a solution.

privacy now not be main priority again for cryptocurrency, maybe at early time while crypto booming everyone talking about  decentralized and privacy which is could not track by bank. but now since blockchain technology technology growth massively and adoption happen in any field, privacy coins as if be ignored.

There are always some hurdles when you want to go through the "legal" route. Regulations will force businesses and companies to comply with KYC/AML laws or face serious consequences in the long run. It'll be up to the person himself to choose an alternative that's decentralized by design. Such an alternative would be "impervious" against regulations, making it a "safe-haven" for people seeking an "escape route" from government surveillance.

While increasing centralization is a concern, there's still hope thanks to the way crypto/Blockchain tech was designed. There only needs to be one decentralized cryptocurrency for Satoshi's vision to be fulfilled. As long as the community preserves Bitcoin's decentralization, nothing else matters. Just my thoughts ;D

Crypto must be decontralized

The manipulation by whales on the big projects is still understandable. I mean it is their money and they are risking their own money to control something which is totally understandable and that's okay. However, the project creators end up doing something that is a bit more shady these days by making it heavily centralized.

I mean look at Avax right now, could you say Emin has no say in it? Dude is basically "owner" of avax, or look at SOL, everyone loves it, and then you look at it and see they can freeze the network whenever they want. So all in all I would have say that it is not really as cool as you may imagine, it is quite centralized these days.

Yes, Cryptoverse has almost become Centralized and this is good in some way and not good in other way, well, but the thing is, many new network/Blockchains are being introducing in the market which are not centralized infact they allow us to do the transaction totally anonymously, if i not get wrong Lighting Network for btc and alt transactions is one of them to do things without being checked by authorities.

Complete decentralization for cryptocurrency is also not very good. We have already seen an increase in fraud, default in ICOs and other harmful consequences caused by the complete lack of rules of conduct in this sector. So some regulation in the use of cryptocurrency is necessary and desirable. In addition, we all must understand that states will not allow circulation of money on their territory that they do not control in any way. Therefore, in everything you need to look for the golden mean.

Satoshi created Bitcoin not to be centralized, but rather to be decentralized and used by the whole world,
yes we know that some countries prohibit the use of Bitcoin and cryptocurrencies, but that can't stop Bitcoin,
and don't forget that Cryptocurrencies are decentralized and it's forever.

Most "stable" coins are centralized at the moment and from the very beginning as there is a commercial company operating each of them and deciding which "stable" coins are valid. And nothing gives a 100% gurantee, you can remember that on 23th of March Cashio Dollar (https://www.coingecko.com/en/coins/cashio-dollar) stopped being "stable" and become zero at one moment.

according to those who have heard from the information, basically some crypto is classified as a truly centralized crypto, I also thought that only bitcoin and ethereum were truly decentralized. and there may also be several factors that appear to be crypto-centralized including the one I mentioned earlier namely bitcoin.

let's all hope that decentralized platforms will continue to exist and develop well, and be able to compete with centralized platforms because otherwise we will know what happened maybe crypto will slowly fall or can be said to collapse.

even if many large companies adopt, we will also not be able to escape it because the government is still in control of the company and its people. but still they don't have full control, they're just going to collect the taxes here.

Blockchain is a wonderful creation and has a promising future if innovation continues in this direction. in my opinion Crypto needs decentralization, otherwise it will soon become a tool of a large conglomerate, and then not much different from ordinary fiat currencies or other commodities. Several governments have started paying attention to crypto and are now talking about tightening regulations.

Well, I also don’t like the idea of centralization.. We already know that Bitcoin was meant to be a currency that is decentralized and same should be for altcoins. But, CEX seems to be pulling a lot of weight in the community as of recent and I don’t like it. Although I don’t think this would lead to any ban on cryptocurrency, the only thing there is that the government can decide anytime to set a tight regulation and even charge heavy taxes on cryptocurrency. Take example – India government charging 30% tax and extra 1% on transactions lol.

his whole discussion of crypto being decentralized and becoming centralized has been going on for long. While a newbie with little knowledge of blockchain will prefer to choose a platform that will do all the backend work of management as banks do for us, A develper who has been in crypto buissness for quite some time might prefer to manage his asstes on his own. Sadely the formers are more in numbers than the laters and in a sense . yes with crypto becoming commonplace we will see more centralization 

Even ethereum is not really "truly" decentralized. In a way it is technologically decentralized, but there are tons o them out there if we consider that as decentralization. The problem is that Vitalik is still holding so much power, whatever he aims at would become a reality because people approve of it, like this eth 2.0 for example, he wants to do that and everyone accept it and we are going to have it.

I am not saying it is a bad idea, it is a good idea and I would accept it as well but that doesn't mean that it is not a problem when he does whatever he wants to and we all accept it. We will see how it is decentralized when one day Vitalik wants to go one direction and everyone says no.

You are right, for example: Solana, most of nodes are owned by a few companys, and we can't join it, it is very dangerous.

Government can only regulate bitcoin and crypto if you store them on centrazlied exchanges. Government can get data from these exchanges as you have done KYC on those exchanges. They can tax you on the capitical gains or crypto stored on the exchanges.
If, on the other hand, you store crypto in decentrazlied wallets and exchanges, the government and financial institutions have no access to those places and they have no control over them.

Crypto is not a spherical horse in vacuum so you need to interact with the world to buy something or sell something and get payment in crypto (or why do you need it else?). And when you interact with outer world your crypto addressed can be tracked. You live in the outer world as well, so government has options to make you to do what they want anyway.

We are at the stage where the mainstream and cryptocurrencies are slowly merging. If a company operates in a country where KYC is required for each client, but also operates on the cryptocurrency market, unfortunately all those who use its crypto-related services will have to undergo verification. If a company operates only on the cryptocurrency market, it only depends on it whether it wants to act anonymously or regulate its activities. Everyone will find something for himself.

Behind each project, if it is not truly decentralized, like bitcoin, there is a project team, interacting with which the government can demand the information they are interested in. And given that many exchanges require KYC, then almost any coin in this case can be considered as a CBDC, which is controlled by the government.

There is a fine line between making it legal and regulations. If it is legal in a nation and the regulations are laxed then you could use centralized exchanges and you could pay taxes and you could basically just accept it as it is. However, if you dislike it and think that it is not doing a good job and your government should reconsider the regulations, or even if they made it a banned thing, then you could totally consider using the decentralized places as well.

I personally like the fact that p2p is a thing even in china, where government is very harsh, which shows that people will continue to use it under even the most difficult possible situations.

Slowly but it seems that the access to cryptocurrency is going bigger again to centralized.
We all know that crypto is special because this is more decentralized, different with banks or other finances.
But further, it seems changing. CEX is getting bigger. More exchanges need our data and identity in order to access or use the platforms. Additionally, some rules and regulations also become the concern in all countries to be able to involve in crypto or not. and the regulation is also getting strict.
This is what I think right now
 Although fortunately, we still have some trusted DEX if we want more decentralization.

That's certainly true, mate. Projects with a publicly-known team are often targeted by governments themselves. As a matter of fact, KYC can be easily enforced when centralizing factors are in play. But when decentralization prevails, this no longer becomes possible. It was a good thing for Satoshi to never disclose his/her identity or Bitcoin would've been doomed by now.

One thing for sure is that Bitcoin is the only decentralized cryptocurrency in the world since its founder is widely anonymous. Not only that but some members of the developer team are anonymous too. This is different from Ethereum where the founder Vitalik Buterin is widely known by the public. The inception of stablecoins and the ever-rising market dominance of centralized exchanges should be a huge concern to decentralization proponents. Most people don't care about decentralization so KYC will continue to be enforced until crypto becomes no different than traditional banking. Who knows if this will mark the end of an era for financial freedom? Just my thoughts ;D

There is one reason why the majority of the exchanges are now asking for our personal details due to the widespread scamming, a concern of many. They are apparently helping us users and their protection as well against these people. Whether we like it or not, the time may come that even DEX exchanges will adopt the system of collecting KYC.
We can't hesitate these changes as this gonna happen if these scamming issues will not stop. And that was the time the government will give 100% support to cryptocurrencies.

Centralization is not a friend of cryptocurrencies (especially bitcoin), if by chances the world of crypto bounces to centralization, know that we are doomed.
Centralization is not the initial idea of Satoshi, infact I can be right to say that what gave birth to our present day bitcoin is the urge to decentralize.
Then, one thing about humanity is that he hardly believe or rely on what he did not create or what he cannot regulate. This urge to be in control is pushing men to invent coins they can manipulate or control.
Then, the government being at the front of this centralization is an advantage and disadvantage to crypto:
Advantage - That it is helping the rapid adoption of crypto and its technology (blockchain) even by the enemies of bitcoin (The government).
Disadvantage -  We are losing at fast pace the original Satoshi vision of crypto.

If DEXs start enforcing KYC, then they wouldn't be decentralized anymore. That's because they're introducing the middleman into the system (something that crypto was meant to avoid in the first place). You don't need to provide personally-identifiable to use Bitcoin or any other cryptocurrency, so why should any decentralized exchange do the same? Centralized exchanges require KYC simply because they have a moral obligation to do so. Going against what was established by the government would mean shutting down their business for good.

While centralization is a dominating force in crypto land, there are still decentralized alternatives out there anyone can use without restrictions. As long as this is the case, there should be nothing to worry about. Just my thoughts ;D