We recently reported that Vitalik Buterin hopes that “centralized exchanges burn in hell as much as possible.” He basically wanted to make a point that decentralized cryptocurrency exchanges are much safer and better than centralized exchanges.
It does make sense why Buterin would make such comments because it is annoying to see centralized crypto exchanges having so much influence over the crypto market. They have the power to dictate which cryptocurrencies become popular and which ones fail. They even ask upwards of $10-$15 million in fees just to get listed on a popular crypto exchange.
In the aftermath of Buterin’s comments, there was a lot of conversations that took place in the crypto community about this topic. That urged the CEO of Binance, Chanpeng Zhao to respond on Twitter saying that there can never be absolute decentralization in the cryptocurrency industry. There will always be core teams and that is some form of centralization.
He even fired back on some of the comments that Buterin made.
Here’s what Zhao’s tweet said:
“There is no absolute decentralization. Projects with core teams still have centralization. Today, Vitalik probably has more king-like powers than anyone else in this industry, and has used it, by serving as advisors to projects, therefore helped to decide their fate, at least fate of their ICOs to a large extent.”
Zhao is correct in the sense that as a co-founder of Ethereum, Buterin has an incredible amount of influence. And when he serves as an advisor to projects, chances are, these projects are going to end up the way he wants them to end up.
Not only that, we recently reported how decentralized exchanges are not some bulletproof, unhackable crypto exchanges. They are vulnerable and right now, they are not living up to the expectations of the people. This was highlighted when Bancor, a decentralized exchange, was hacked. So there are clearly a lot of things that need to be worked on before decentralized exchanges can start leading the way.
Buterin chose not to respond to Zhao’s tweet directly. And that was probably a good move on his part because that might have ended up in a downward spiral, if not between these two gentlemen, then certainly among their followers.
But Buterin did reply to a tweet from a new French cryptocurrency exchange Blockchain.io that asked whether their “decentralized settlement feature” would send them to purgatory.
Here’s how Buterin responded:
“It’s much better than a fully centralized exchange, but it doesn’t solve the other problem, as centralized exchanges have a lot of control over the market and can choose which currencies become the most popular etc etc.
In all, I think this is a very good idea and I hope that more cryptocurrency exchanges will use this semi-centralized method.”
In a way, Buterin agreed what Zhao said.
And while the adoption rates are slower toward semi-centralized exchanges, the fact that both Buterin and Zhao agree that this is the way to go does mean that it is possible that in the future we might see semi-centralized exchanges leading the way.
It is possible that to be more secure, centralized exchanges will start moving toward offering hybrid solutions similar to what IDEX and Blockchain.io offers.