Ethereum (ETH) Co-Founder Vitalik Buterin Hopes ‘Centralized Exchanges Burn in Hell As Much As Possible’

Siamak Masnavi

On Friday (6 July 2018), in an interview ("Fireside Chat") with Canadian journalist Jon Evans at the Techcrunch Sessions: Blockchain event in "Crypto Valley" (Zug, Switzerland), the home of the Ethereum Foundation, Vitalik Buterin said that he personally hopes that "centralized exchanges burn in hell as much as possible."

This was in reponse to the interviewer asking Vitalik if he believed that one day, down the road, that decentralized exchanges would be "where the action is."

After the "burn in hell" comment, Vitalik continued answering the question:

"In practice, first of all, currently, I think on the fiat to crypto side, it is very difficult to decentralize because... you ultimately are interfacing with the fiat world, and the fiat world is one that has only centralized gateways. So, I do think there is valuable services that are being provided there that are very hard to decentralize. On the crypto to crypto side, I do think that it's still early days, and the technology is going to become more and more efficient over time, and at some point, we are going to see it... become much easier to fairly quickly turn a token of one kind into a token of any other kind. Like, basically, with the decentralized exchanges available today... one of the nice things is that they already have a nice usability gain, which is that you don't have to register a login (create an account), go through some stupid web interface. All you do is just send tokens of one type to one address, and then you immediately get tokens back at another address. So, from a user experience point of view, it's great. And that is obviously something that needs to be defined a lot more around the edges, but it is something that I think we are going to start seeing more and more of."

He then went on to explain why he disliked centralalized exchanges so much:

"Even if centralized exchanges end up having a lot of volume, the better the decentralized exchanges are... the more happy I am because that way we can really take away this stupid king-making power that these centralized exchanges have... the ability to decide which tokens become big by just deciding to list them and charge these crazy ten to fifteen million dollar listing fees. And the more we can get away from that world and into something which actually satisfies the blockchain values of openness and transparency, the better."

Vitalik also found an interesting way to explain one of the main benefits of a decentralized system (i.e. a central authority cannot make arbitrary decisions that affects all users):

"The thing with developers is that... we are very fungible people... one developer goes down, someone else can keep on developing... If someone puts a gun to my head and tells me to write a hard fork patch, I will definitely write a hard fork patch. I will write up the Github issue, I will write up the code, I will publish it, I will do everything they say. If I do this... how many people here would be willing to download the update and switch to that chain? I see relatively few raised hands. This is called decentralization!"

On 6 February 2017, Vitalik wrote a blog post titled "The Meaning of Decentralization," in which he said that "Decentralization" is "one of the words that is used in the cryptoeconomics space the most frequently", but "it is also one of the words that is perhaps defined the most poorly." In that article, he said that when it came to software decentralization, there were three separate axes/dimensions of centralization/decentralization." He identified these as follows: 

  • Architectural (de)centralization
  • Political (de)centralization
  • Logical (de)centralization

According to Vladik, this means that traditional corporations, such as centralized crypto exchanges, are "politically centralized (one CEO), architecturally centralized (one head office) and logically centralized (can’t really split them in half)."

At press time, according to CryptoCompare, Ethereum (ETH) is trading around $467.69, down -0.03% in the last 24 hour period.


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