Binance: Transition to Decentralization or Shameful Fall
Binance, known as the world’s largest exchange, has gained even more fame over the past year, thanks to the huge success of Binance Smart Chain. This fame for the most part was also associated with several major hacks, as a result of which people lost tens of millions of dollars, which led to increased control over the company.
Before the success of BSC, the problems that the exchange faced could be considered just an annoying misunderstanding. However, last year, when there was an explosion of DeFi, and the price of transactions on the Ethereum network skyrocketed, BSC came with its much lower transaction fees, and dramatically increased in use. Since US residents at that time were still studying DeFi and everything related to it, they could not immediately switch to the BSC offer. They wanted to first learn more about the chain, and how it functions. What I learned made them fans of BSC, as well as millions of users who had previously joined.
Millions of users enjoy the decentralized aspect of cryptocurrencies, although they can use a centralized exchange to buy crypto. While some people are doing this, other people who claim to love decentralization are defending a centralized blockchain? There is so much irony in DeFi. Decentralized finance in a centralized network!
With only 11 validators who choose validators for the day, it’s hard to argue that this is not one of the most centralized networks. Even with the placement of their BNB, some can easily switch and, thus, cause irreparable damage to the image of the chains. Many people thought that they would see them open up to more validators or a completely different system than they have, but this did not happen.
Quiet opposition to decentralization
The main governments around the world are centralized power structures. Banks and finance generally operate in the same way, and these two groups work together.
Do people really think that they will allow Binance to become a powerful new centralized structure? Think of Facebook and its Libra.
We must be crazy to think so, and everything that happens proves it. Malta stated that Binance has no right to operate in their jurisdiction, and the Cayman Islands said that the exchange is not licensed from them.
Without a headquarters, the situation for Binance may end up being banned from working anywhere. Both in the West and now in the East, governments are targeting this company and its network. Governments want their share, and right now Binance can continue to work without paying its share to any government, but this may be fraught with consequences. Japan, Poland, China, Canada, Thailand, the United Kingdom and the United States, which are currently exploring Binance, form a centralized structure to oppose the decentralization of finance.
In order to survive, or at least for their chain to survive, Binance and CZ will have to decentralize it, just like Ethereum. If this does not happen, the chain will eventually fall apart when people leave it, and it will no longer exist. BSC can be a really useful tool and place to implement DeFi, but like everything in life, it must evolve and change.
Right now they don’t, which could eventually lead to a crash, which would be a shame. It remains to be believed that over the next few weeks, as the situation continues to deteriorate, the right choice will be made that will preserve the achievements of the BSC. Attempts to stay in a centralized environment will only lead to the fact that more people will be disconnected from the blockchain and cryptocurrencies.