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May 01, 2018, 02:54:35 AM |
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Recently there have been a lot of accusations, that because of extreme popularity and spread of bitcoin mining in China “mining centralization” occurs. Experts estimate that around 71% of bitcoins are now mined there. China not only produces most of mining equipments, but also huge mining farms are located there, taking advantage of cheap electricity. China is also a leader in number of mining pools — collaborations between individual miners and mining companies. China is home to four of the five largest Bitcoin mining pools. Before Beijing banned ICOs (Initial Coin Offerings), China accounted for 90% of all bitcoin trade. Having so much mining power centralized in one country put in doubt decentralization of Bitcoin and exposes the Bitcoin network to a worrying degree of political risk. But… … despite all the above-mentioned factors, still Bitcoin is decentralized. The crucial distinction between system of traditional money and cryptocurrency is that if you use crypto, you have the right and possibility not to hand your money to third parties, while in case of fiat you just can’t avoid that. Also if you use fiat money, your life is traced through your bills — whatever you do, you can’t stay unnoticed. Talking about crypto: yes, many people use exchanges and third party services, because it’s easier to manage their digital money that way, but they can deal with their crypto funds directly, keeping anonymity and privacy. While a user of fiat is always forced to use centralized service, Bitcoin user is never forced to do it. They can, for their own convenience, use exchanges or other services — but they are never forced. System of traditional money is centralized, and the clear proof of it is that only government controls money and has the right to issue it. Try to invent your own money — you will be punished by the law. But nobody can prohibit you from inventing your own digital currency — it will cost as much as people are ready to pay for it, and now we can see the birth of new cryptocurrencies almost every day. Cryptocurrency removes a whole layer of banking bureaucracy, giving you financial freedom. Even electronic payments can’t give this freedom — PayPal, for example, can freeze your account any time it has any suspicions. Nobody can ever freeze or forbid you access to your Bitcoin wallet. You don’t leave any personal information while using cryptocurrency. You are the only one who has access to your funds. So, answering the question “Is Bitcoin truly decentralized?”, we will say with absolute certainty: “Yes, it is”.
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