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:
AdvertisementCensorship 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.
Jackson said: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 Lightnin...