Vitalik Buterin Hopes Centralized Exchanges ‘Burn in Hell’

Jul 7, 2018 at 16:12 Update Date :Jul 7, 2018 at 16:12 UTC

In an interview with a TechCrunch journalist Jon Evans at TechCrunch Session: Blockchain, Ethereum creator Vitalik Buterin criticised centralized exchanges, reiterating his opinion in favour of decentralized exchanges. Buterin slammed the centralized crypto exchanges for their ability to decide which cryptocurrencies ‘become big’ by charging hefty listing fees ($10 to $15 million) from these companies.

He was quoted saying,

“I definitely personally hope centralized exchanges burn in hell as much as possible.”

Emphasizing on the importance of DEX (decentralized exchanges), he said the crypto community as a whole should prevent the centralized exchanges from using their “stupid King making powers”. The centralized exchanges compromise the original Blockchain values of ‘Openness and Transparency’.

Centralization of exchanges gives rise to the problem of cryptocurrencies being accumulated into one point of centralized attack, which has resulted in several instances of exchange stores being drained. Bitgrail and Coincheck suffered losses of $170 million in XRB and $400 million in NEM respectively, as a repercussion of ‘hoarding of funds’ at one address which eventually attracts ‘refined attackers’.

The decentralized exchanges enable the users to retain ownership of their cryptocurrencies and private keys, a privilege not granted by the centralized exchanges. Yet, DEX’s have other disadvantages like relative ‘lack of liquidity’ and ‘front running’.

Besides lack of liquidity and front-running, one of the major roadblocks in the way of Ethereum becoming truly decentralised is the problem of user authentication. Undoubtedly, sending an ETH token is just about signing a transaction, and it is not that complex to generate a private and a public key, and manage wallets.

But, what happens when you lose the keys and the password?

“If all user authentication methods end up failing it’s going to be hard to reach mainstream adoption”, Buterin said.

He then went on to speak about his interest in ‘social recovery and multi-key schemes’ in the context of WeChat’s social recovery system.

Ethereum is currently one of the largest cryptocurrencies with the market cap of $47.5 billion, only second to Bitcoin.

Speaking of decentralization in the crypto markets, it should be noted that Binance, the world’s largest cryptocurrency exchange, in March 2018 announced the opening of a decentralised exchange, as did Huobi. Following the similar path, OKEx also recently became vocal about their plans of setting up a decentralised exchange as the concept of decentralization is being singled-out by a lot of analysts.

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