Changpeng Zhao said that there are several aspects of decentralization and that it is part of a gradient scale, explaining the different ways in which even bitcoin can be considered centralized.
Changpeng Zhao talks about decentralization and its degrees.
Much has been said about the benefits decentralization brings to crypto-currency projects and how it differentiates some initiatives from others. Changpeng Zhao, CEO of Binance, reflected on the importance of decentralization and how this feature should not be the goal, but a tool to achieve several goals related to a crypto currency project.
In a Binance blog post published on October 9, Zhao explained that decentralization is not absolute and has several key aspects. He explained:
Each aspect is a gradient scale, not just black and white. It is also important to remember that decentralization is a means to an end, not the end itself. The goal is freedom, security and ease of use.
According to Changpeng Zhao, each of these aspects can make different projects (even bitcoin) seem centralized, depending on what is being considered.
CEX still important
Similarly, Zhao noted the importance that centralized exchanges (CEX) still have. According to Zhao, most people still use centralized exchanges as a way to keep their crypto-currencies safe, as most people are still not able to keep their funds safe with the tools available today. He stated:
This is why CEXs are more popular today. Centralized exchanges provide an incremental step for users to access crypto and can act as a bridge between centralized and decentralized systems.
Zhao makes these statements in the wake of a large-scale hack in which an unknown attacker was able to take control of 2 million computers, leading validators to shut down the Binance Smart Chain blockchain to fix the hack. This action was highly commented on because of the speed with which the network’s validators coordinated to shut down the chain to prevent further losses.
However, Zhao says he supports decentralization and says the exchange will continue to invest in developing solutions that balance security and freedom in the future.