And I think that's exactly the point. Cryptocurrency promoters endlessly talk up how it's part of a decentralized wave of the future. But in practice it's quite centralized, and the incentives point in that direction for the future. That's one of the points made very well recently by Moxie Marlinspike: https://moxie.org/2022/01/07/web3-first-impressions.html
It’s not centralized though, crypto.com is one of many exchanges. Anybody can create an exchange, and a failure in one exchange doesn’t propagate to the rest of the network.
Do you consider a website breaking a single point of failure for the internet?
The original vision of Bitcoin was "a peer-to-peer electronic cash system" "allowing any two willing parties to transact directly with each other without the need for a trusted third party". So yes, something like crypto.com represents significant centralization.
Crypto.com and its customers are willing parties who can transact with each other using this system, I'm not sure what your point is. The problem here is that one party trusted another party to hold on to their funds, and the holding party lost the funds. How is that an indictment of the protocol itself?
Or put another way, how does Crypto.com and other centralized systems prevent me from using Bitcoin the "right" way?
Did you read the Marlinspike post? I think he's pretty clear on the issues.
But in brief my point is that as with internet itself, a protocol that allows for decentralization is not sufficient for something to be truly decentralized. Despite the vast amounts of hype about the decentralization of cryptocurrency and "web3", in practice we are seeing that it's tending toward centralization. Which personally I don't care about except the extent to which I still have to listen to the hype that has less and less connection to the practical reality.
It’s not an indictment of the protocol, so much as it is saying that the protocol is too low-level for average users and therefore centralized players (like Coinbase) tend to step in and provide the desired service.
I'm not sure, is the x86 instruction set too low level? Yes if you expect users to interact with it directly, but not for user facing products to be built on top of.
You can point to centralized products built on top of blockchain, but also decentralized ones.
An important difference being that nobody ever expected users to use the x86 instruction set directly. Whereas the very clear initial expectation for Bitcoin was that it was an actual currency used for transactions by end users.
On what part of the stack exactly? Are they crafting RPC requests to a BTC node manually? Using wallet software? Using more advanced wallet software with social recovery features and named addresses?
I think you may be forgetting, earlier users of computers were using punchcards..
Are you... asking me to explain what the Bitcoin folks were thinking when they claimed they were creating a viable peer-to-peer electronic cash system? Sorry, you'll have to ask them that. About 80% of what cryptocurrency advocates claim to believe seems unrealistic to me. But given that they published that paper in 2008, I suspect punch cards were not what they had in mind.
Yes. A few years ago decentralized exchanges did not exist, now one of the largest exchanges is fully decentralized..Obviously simple payments could always be made in a decentralized way but creating actual applications wasn't possible until recently.
It’s not centralized though, chase.com is one of many banks. Anybody can create a bank, and a failure in one bank doesn’t propagate to the rest of the market.
Yup, in that sense banks are decentralized in a way..although there is a bank called the "central bank" that creates the base monetary supply, so not sure I totally agree with the comparison..
But yes, I would agree that banks are about as decentralized as crypto exchanges. But that's kind of the point, you shouldn't conflate exchanges (or banks) with the currency itself.
It’s objectively dumb to look at a service provider and conflate that with what the proponents are talking about.
Have you considered that you are in the wrong decade? Its year .. 13..? Its time to be up to speed on this.
If you run into a proponent that is also conflating these things you should simply correct them about the difference between onchain activities and third party centralized service providers, which means educating yourself first.
The only reason the hacker gets to keep the funds and have no civil or criminal liability is because of them using the actual decentralized rails and uncensorable contracts such as Tornado.cash
