Cryptocurrencies are such a popular investment option because they are not controlled by any banks or government authorities. This means that traders and investors can freely buy and sell this asset without the interference of country relations. However, people now falsely believe that all the cryptocurrencies that they trade with have such free properties. Cryptocurrencies that are not controlled or distributed by banks or government authorities are known as decentralized cryptocurrencies. Many of the popular cryptocurrencies that people invest and trade with are decentralized such as Bitcoin, Ethereum Litecoin, Bitcoin Cash, etc. However, there are some centralized cryptos that are controlled by banks and governments that people consider as decentralized.
Shay Benhamou talks about the cryptocurrencies that people mistakenly have taken as decentralized currencies. Moreover, he also discusses some cryptos that are partially decentralized.
Cryptocurrencies That Are More Centralized Than We Realize
XRP is a popular cryptocurrency that traders invest in frequently. However, what people may not know is that XRP is a highly centralized cryptocurrency. What makes centralized cryptocurrencies so undesirable is the fact that the traders don’t have complete rights over them. The issuing party holds the power to alter the rate at which the cryptocurrency will be sold. Ripple is a centralized exchange that holds a large share of XRP in its system. This share is large enough to have an effect on the cryptocurrency. This is why XRP is known as a partially centralized cryptocurrency.
NEO is also among the list of centralized cryptocurrencies that people consider to be decentralized. It is a cryptocurrency that people say is up to par with Bitcoin and Ethrereum. NEO has received much criticism because of this centralization. However, NEO made efforts to become a more decentralized cryptocurrency. NEO ran as a centralized cryptocurrency because it could offer much higher transaction speed and surpass bitcoin and Ethereum. At the moment, NEO is partially centralized.
EOS is also a centralized blockchain that has a limited number of nodes. In total, EOS has twenty-one nodes that check the transaction and validate them. In addition to the lack of decentralization, the company of EOS claims that the EOS token does not have any value. The majority of EOS tokens are owned by a certain group of people which gives them a lot of power to influence the sale of the asset explains Shay Benhamou. So, if you are a fan of EOS, you should closely look at what you are investing in.
Binance is a fully centralized cryptocurrency exchange. This means that any asset that you buy through this platform must be kept in a digital wallet that this exchange manages. The whole purpose of using exchanges to trade cryptocurrencies is that it doesn’t require a middle man to monitor your transactions. But this is what happens when you trade with Binance. However, Binance has plans to remove the centralized system and introduce a chain exchange called Binance DEX which will work as a decentralized platform.
IOTA is another cryptocurrency asset that many people are fond of investing in. However, this crypto is highly centralized. This crypto is an incomplete asset which means that it was launched before the technical aspects were dealt with. It has many bugs and flaws when it comes to its technical settings. If you have been investing in IOTA, then you should probably reconsider because Shay Benhamou says that this asset has questionable security protocols as well.
These are some of the many assets that investors comfortably invest in because they don’t check their centralization status. Since cryptocurrency news only hits the mainstream media when an asset is growing or falling, people don’t realize the importance of checking whether they have complete ownership of their asset or not. You will find that a lot of the cryptocurrencies that people actively invest in are either completely or partially centralized. Sometimes the decentralization of the asset is compromised in order to compete with Bitcoin.