Dogecoin Creator says “the Institutionalization of Crypto is a Paradox”
Jackson Palmer, the creator of Dogecoin speaks up about how “Institutionalization of Crypto” is a paradox in an op-ed piece of the latest edition of Diar Research.
There has been a lot of excitement and hype around the Bitcoin ETF approvals and wall street giants like ICE’s BAKKT, Fidelity and NASDAQ getting into Crypto. People believe that this will bring more legitimacy to Crypto and will lead to an inflow of new money.
Jackson criticizes this approach and urges people to take a step back and look at the fundamentals. The three main advantages of decentralized digital currencies according to Jackson are:
- Censorship resistance
- Trustless transactions
- Verifiable history
At the end of the day, the goal of Decentralization is to maintain these three tenets. But with custodians like Coinbase and products like Bakkt this is no longer true.
- Centralized entities like Coinbase can censor users transactions and even accounts
- With central points of failure, if Coinbase.com is hijacked then the user will lose access to his Bitcoins
- It is no longer trustless as the central third party holds the private keys and the user has to trust the third party
- Huge sums of money are moved by the institutions off the chain which makes it less transparent and nonverifiable
The three core principles of Cryptocurrencies are torn down by the entry of these institutions.
If a user is accessing their account through a centralized website, handing custody of their private keys entirely to a trusted third-party, and is unable to verify a ledger of how their funds are being handled by that third-party, are they really using a cryptocurrency?
…but for a movement previously described as “the real Occupy Wall Street”, cryptocurrency now sadly resembles a community that instead wants to be occupied by Wall Street itself.
He sees a glimmer of hope at the end as scaling technologies such as Lightning and Plasma are coming and there are projects which focus on user privacy such as Zcash and Grin.
Bitcoin has been on the sidelines for over 10 months now, and naturally, people are getting restless eagerly waiting for a bull run. Crypto is one of those industries where retail investors have entered before the institutional investors which puts it in a unique position for massive gains.
Yes from a fundamental perspective if you do not hold your private keys then its as if you don’t own your Bitcoin, but a majority people care less about the fundamentals and more about the gains to be made which is not necessarily a bad thing as we need Bitcoin to succeed as a store of value first if it has to succeed as money for the world.
Did you like the news you just read? Please leave a feedback to help us serve you better
Disclaimer: Blockmanity is a news portal and does not provide any financial advice. Blockmanity's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Blockmanity won't be responsible for any loss of funds.