Centralization vs. Decentralization

[coin-score.ai]

Hello fellow Bitcointalkers!

I've been mulling over this for quite some time, and I feel it's time to dive into one of the most profound topics in the crypto world: Centralization vs. Decentralization. I've noticed this duality splits the community and I wonder, is there a balance to strike?

Centralization:

Pros: Potential for faster transaction throughput, a focal point of control and regulation, easier to implement changes and updates.
Cons: Risk of a single point of failure, susceptibility to censorship, a tendency towards monopolization.

Decentralization:

Pros: Censorship resistance, enhanced security through distribution, inheriting the initial spirit of Bitcoin and the idea of autonomy.
Cons: Potentially reduced scalability, decision-making difficulties, possibility of fragmentation and disparities.
It's clear both come with their merits and demerits. But, do we need to acknowledge that both can coexist? Are there situations where centralization could be beneficial? Can there be a balance?

Eager to hear your thoughts! I believe it's vital to discuss these matters to guide the future of blockchain tech and cryptocurrencies in the right direction.

Let's have a fruitful discussion!

[Huppercase]

Hello fellow Bitcointalkers!

I've been mulling over this for quite some time, and I feel it's time to dive into one of the most profound topics in the crypto world: Centralization vs. Decentralization. I've noticed this duality splits the community and I wonder, is there a balance to strike?

Centralization:

Pros: Potential for faster transaction throughput, a focal point of control and regulation, easier to implement changes and updates.
Cons: Risk of a single point of failure, susceptibility to censorship, a tendency towards monopolization.

You forgot to include potential hack, threat to privacy, possible lost of funds. You didn't look into FTX before you write out the cons of centralization.
I don't understand what you mean by throughput, what is exactly is centralized maximizing in a centralized system except for database and optimizations which comes with at the expense of KYC, you can't use their service if you are not verified, is there anything special about that? I'm even trying to picture one good advantage of centralization but the thought of centralized exchanges will not make me see much benefits but demerits of using them. Centralizations always put their ambition before the people.

Decentralization:

Pros: Censorship resistance, enhanced security through distribution, inheriting the initial spirit of Bitcoin and the idea of autonomy.
Cons: Potentially reduced scalability, decision-making difficulties, possibility of fragmentation and disparities.
It's clear both come with their merits and demerits. But, do we need to acknowledge that both can coexist? Are there situations where centralization could be beneficial? Can there be a balance?

Eager to hear your thoughts! I believe it's vital to discuss these matters to guide the future of blockchain tech and cryptocurrencies in the right direction.

Let's have a fruitful discussion!

Without decentralization, centralization will die quickly but decentralization will remain functional until it last breath of the people that protects it's ecosystem, the reason why we have centralization today is because of decentralization, Dex can survive with Cex but if table were to turn around, the latter will not make it. So Dex win and I don't think decentralization are even forcing balance, no need for that unless cex's are trying hard.

[Beparanf]

But, do we need to acknowledge that both can coexist? Are there situations where centralization could be beneficial? Can there be a balance?

They are proven coexist since there’s a lot of decentralized that is now being centralized through the use of different medium such as exchange to regulate assets that was supposed to decentralized through the use of KYC to all customers. It’s not directly centralization towards the decentralized token but rather through the user holding it or purchase through exchange because it removes privacy of owning that particular token since it can be tracked through the use of blockchain record from exchange.

[royalfestus]

The advantages you outlined for centralized exchanges outweigh the drawbacks associated with decentralized exchanges. I'm not sure if this was intended to divert users' attention from decentralized exchanges, but I believe that decentralized exchanges are more appealing to both large and small traders. Personally, I believe that the development of multi-chain decentralized exchanges will be a significant advancement over centralized exchanges in the future.

[fapar]

The example of mining shows that we ourselves are prone to centralization; miners choose pools with a large number of participants, thereby exposing the project to the danger of centralization. Nowadays, most Web3 projects offer a full range of services (exchange, swap, LP) and there are more and more such projects every day, which is positive for decentralization.

[nelson4lov]

Eager to hear your thoughts! I believe it's vital to discuss these matters to guide the future of blockchain tech and cryptocurrencies in the right direction.

Let's have a fruitful discussion!

In my opinion, the status quo systems in crypto are good enough for now until we can find more better ideas that would improve decentralization or take us closer to full decentralization of all of the system components of any of the blockchain networks available right now. From network infrastructures to applications (Smart contracts) built on these networks. Initially, I used to think that Decentralization is easy but then, the demerits like delayed consensus and issues with scalability makes it harder to achieve this. This is why the Blockchain Trilemma is still an unsolved case till date.

A bit of centralization to protect core system resources plus decentralization of other network operations is viable for now. I'm on the lookout for new ideas that might improve decentralization without tradeoffs in security and scalability.

[Silberman]

The example of mining shows that we ourselves are prone to centralization; miners choose pools with a large number of participants, thereby exposing the project to the danger of centralization. Nowadays, most Web3 projects offer a full range of services (exchange, swap, LP) and there are more and more such projects every day, which is positive for decentralization.

This happens because of the economy of scale, an example of this is Walmart, Walmart can sell its products for cheaper than retail stores as they can get discounts due to the enormous size of their operation and their ability to acquire the best possible technology for the job, so it is not surprising that mining cryptocurrencies follows the same principle, so as we can see centralization is a natural occurring event, however its cons are also naturally occurring, which is why it is important to still push for decentralization, especially when it comes to our finances and the money we use on our everyday lives.

[jossiel]

But, do we need to acknowledge that both can coexist?

Yes, they are both coexisting and there can't be just decentralized or centralized.

That's why it is needed for most of us to know the importance of having both of it. In the past, if it's about hacking incidents, both of these platforms have been targeted by hackers.

And that means that there's no safe one on this one because hackers are targeting those areas that has money but it is that many of decentralized platforms or exchanges have a weaker security.

[JeromeTash]

My question is;  wouldn't you love to have a complete control of your funds?
Are you a child where someone else or a third party has to be in custody of your funds at a fee?
Answer that and you will knoe what my thought is.

Everyone needs decentralization!

[yazher]

If you are long enough been in this crypto industry or have enough experience and knowledge regarding those two exchanges, you will know the right time to use them and you won't miss some crucial points regarding some of their critical issues. For example, when you want some fast transactions and want to easily get your altcoins converted and send it to your local exchanges and withdraw it as soon as possible, centralized exchanges are recommended for it and when you want to keep your transaction secured and safely stored your crypto for a short period of time, you may want to use decentralized exchanges.

[vv181]

It's clear both come with their merits and demerits. But, do we need to acknowledge that both can coexist? Are there situations where centralization could be beneficial? Can there be a balance?

Certainly, there is nothing wrong with both to coexist.

Are there situations where centralization could be beneficial? Can there be a balance?

I hardly think there are any significant advantages. But I believe it solely depends on the context, within some settings a degree of centralisation is required, and rather a necessity. So there couldn't be an exact balance between centralization and decentralization, one thing to note is that, currently, many cryptocurrency projects sacrifice some degree of decentralisation and yet still claim they are decentralized, this is what I think is rather wrong.

After all, cryptocurrency is a brand new thing, so we shall see how it develops and gains maturity to see how the space will evolve.

[agustina2]

Being centralized and decentralized have pros and cons.

We can't hide the fact that there's a benefit of being centralized and decentralized depending on what people need.

Which side should we choose? I don't really care as long as I think it won't bring any harm on my part.

[GreatArkansas]

Being centralized and decentralized have pros and cons.

We can't hide the fact that there's a benefit of being centralized and decentralized depending on what people need.

Which side should we choose? I don't really care as long as I think it won't bring any harm on my part.

Yes, I agree with this, because there are some people that being too decentralize will make their life harder while on the other hand, being centralized is also not good for some other people. It's kinda annoying because there's no perfect at all.
But with Bitcoin is being decentralized, it's a good thing I can see because it solve most of the problem that we have on centralized entities.

[wajik-tempe]

If you are long enough been in this crypto industry or have enough experience and knowledge regarding those two exchanges, you will know the right time to use them and you won't miss some crucial points regarding some of their critical issues. For example, when you want some fast transactions and want to easily get your altcoins converted and send it to your local exchanges and withdraw it as soon as possible, centralized exchanges are recommended for it and when you want to keep your transaction secured and safely stored your crypto for a short period of time, you may want to use decentralized exchanges.

I'm totally agree. Centralized exchanges are equivalent to express trades.  Excellent for circumstances requiring speed and simplicity, high-volume trading, and access to a diverse choice of altcoins. While DEX, they prioritize security and provide you more control over your assets, making them ideal for circumstances requiring safety and sovereignty. They're great for folks who wish to keep their crypto assets safe while still maintaining ownership without relying on a central authority

[0t3p0t]

Accumulating both centralized and decentralized assets could work together normally. We all know that we need both depending on what we are doing with our crypto funds. I personally have no problem with two of them as I already knew the pros and cons. I think centralized assets or exchange will only be used for short term while decentralized is for long term.

[Girlinthehood]

Thank you for this relevant and well-articulated discussion topic! The question of centralization versus decentralization is indeed a crucial debate subject in the realm of cryptocurrencies and blockchain.

I would personally lean towards the importance of decentralization, especially in the context of the original philosophy of the blockchain. The fundamental idea behind cryptocurrencies like Bitcoin was precisely to eliminate the need for a central authority, thereby facilitating peer-to-peer value exchange and creating a more open and accessible financial system.

[JunkieMiner]

Accumulating both centralized and decentralized assets could work together normally. We all know that we need both depending on what we are doing with our crypto funds. I personally have no problem with two of them as I already knew the pros and cons. I think centralized assets or exchange will only be used for short term while decentralized is for long term.

Mostly people store their funds in Centralized Exchanges, like we can say in an Exchange like Binance. These people store mostly their funds and most people trust it because the security system of some of them is very strong. While in Decentralized Exchanges people can only trade for low term. In this, some projects have also a high slippage which requires a lot of fees, this people mostly deny it some times. Everyone has a choice of their own, but I personally like Centralized Exchange the most, and I do trading mostly in Centralized Exchange as it is completely secure and easy to use.

[Xal0lex]

Centralization has several tangible advantages. With centralization, the number of scams and frauds will decrease because there will be control and regulation, there will be a minimum of anonymity among development teams, and there will be much less exit scams. With centralization, cryptocurrency adoption is faster because investors and coin owners are protected from various frauds. Decentralization is a true solution for crypto users, but it generates a huge number of scams and scammers.

[jaberwock]

Accumulating both centralized and decentralized assets could work together normally. We all know that we need both depending on what we are doing with our crypto funds. I personally have no problem with two of them as I already knew the pros and cons. I think centralized assets or exchange will only be used for short term while decentralized is for long term.

Mostly people store their funds in Centralized Exchanges, like we can say in an Exchange like Binance. These people store mostly their funds and most people trust it because the security system of some of them is very strong. While in Decentralized Exchanges people can only trade for low term. In this, some projects have also a high slippage which requires a lot of fees, this people mostly deny it some times. Everyone has a choice of their own, but I personally like Centralized Exchange the most, and I do trading mostly in Centralized Exchange as it is completely secure and easy to use.

Most of us here are not a newbie anymore and as an experienced user, we know the phrase called " not your keys not your coins " . So don't say that many people store their funds inside a CEX. No matter how strong their security are, it can still be hacked unexpectedly by a skilled hacker. DEX on the other hand can work differently.

I think there is no way to store our funds on them but we should always disconnect our wallet right after we trade just to be safe. It's also a good idea to use a separate wallet only for this purpose. Like you I also prefer CEX. I can only trade on DEX if the coin that I got from the airdrops and bounties are listed on it.

[Silberman]

Accumulating both centralized and decentralized assets could work together normally. We all know that we need both depending on what we are doing with our crypto funds. I personally have no problem with two of them as I already knew the pros and cons. I think centralized assets or exchange will only be used for short term while decentralized is for long term.

Mostly people store their funds in Centralized Exchanges, like we can say in an Exchange like Binance. These people store mostly their funds and most people trust it because the security system of some of them is very strong. While in Decentralized Exchanges people can only trade for low term. In this, some projects have also a high slippage which requires a lot of fees, this people mostly deny it some times. Everyone has a choice of their own, but I personally like Centralized Exchange the most, and I do trading mostly in Centralized Exchange as it is completely secure and easy to use.

There is nothing wrong with using a centralized exchange if that is what you want, after all we cannot deny that their fees are cheaper, their service faster, and I can see why traders prefer them over DEXs, however to store our coins there for the long term is a big mistake, and this is a lesson we have seen over and over again and many traders still refuse to learn it, despite knowing very well that if a hack happens to the exchange they are using the losses they can accumulate will be massive.