Binance reveals that it’s not 100% decentralized!

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(Edited)

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Binance recently froze their Smartchain blockchain..

  • ..to reverse the effects of a hack which stole 110 million dollars.

Binance News

  • This move by Binance revealed the fact that Binance isn’t 100% decentralized, horrors.

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  • Because Binance has a degree of centralization, it can stop the blockchain from simply recording all the transactions as they occur on the blockchain, and go back into this record, and change the record. Thus partially correct the thefts of cryptocurrency, and returning 80% of the stolen property to its rightful owners, Binance is not 100% decentralized.
  • This degree of control is called centralization and it is viewed by some, as evidence of evil.

Ethereum News

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  • Back in a time when Ethereum was young, there was an event where someone stole several million Ethereum.
  • The people controlling the Ethereum blockchain stopped the blockchain from merely recording events, and went back into the recorded blockchain and erased the theft of Ethereum, returning the stolen Ethereum to its owners.
  • This move revealed the fact that Ethereum wasn’t 100% decentralized, horrors.
  • This degree of control or centralization of Ethereum is viewed by some, as evidence of evil.

Decentralization versus Centralization.

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  • Some would claim that the world of cryptocurrency is a dichotomy: black and white, good and evil, decentralized and centralized.
  • I think that a blockchain, like the world, is much more complicated. And decentralization and centralization, exist on a spectrum.
  • I think that blockchains exist on a spectrum between purely centralized, and purely decentralized, and that none are pure examples of either end of the spectrum.
  • I think that a working blockchain has components of both decentralized software and centralized software.
  • The amount of both should be optimized based on the purpose of the blockchain.
  • I think that Binance and Ethereum are examples of how the balance between decentralization and centralization can be mixed together and what the final product can look like.
  • People can see the speed of transactions on Ethereum, and the cost of transactions on Ethereum. People can also see the cost of transactions on Binance and the speed of transactions. These are the result of design differences between the blockchains.
  • They are the result of choices made, and the consequences of those choices.
  • I think the world of cryptocurrency, and blockchains contains both the centralized and decentralized as tools.
  • These tools are neither good, nor bad, they simply exist as tools.
  • Good and Bad are subjective labels of the outcomes from the use of the tools.
  • The return of stolen funds to the owners by both Ethereum and Binance, after their respective hacks are one of these outcomes.
  • These actions are made possible by the tools, but the tools are not good or bad, the outcomes of the use of those tools however can be easily characterized as good or bad.
  • But it is a reflection of the diversity of thought regarding this issue, that we debate whether returning stolen funds to investors, is actually good or bad.
  • It is a big part of peoples passion for decentralization to design tools which don’t pick sides, and both good and evil use the tools. Then what happens, happens. There is no way to change the outcome.
  • This removes human influence, both good and bad. This path removes human favoritism, and corruption, but it also removes one path to Justice. It’s a trade off.
  • I think it is an important part of our growth to understand these issues, and if we can see each other’s perspectives on this issue we have a broader perspective, which I think makes us better problem solvers; by allowing us to see all of the problem, instead of just the portion of it visible to us from our perspective.

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  • What do you think?

@shortsegments

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15 comments
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but someone doubted that this was not so? 😂
It's been a long time since BINANCE means anything to me, besides, the BNB blockchain is totally centralized, we already knew that! or not?

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I think the degree of centralization is not known, but suspected to be high. But this reinforces the belief that on some level it’s very centralized. Although the fact that they could not return all the stolen crypto shows that in a broader economy not even centralization can protect you completely.

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I hope more decentralized options arise so there's less dependance on Binance. That exchange is too powerful for the crypto space it is not healthy.

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History suggests that power corrupts. So your concern has merit. The same power that allows Binance to do good.. ..

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I like the analogy of seeing them as tools, they are not bad or good. It's how we use them. Given the complicated nature of us humans, decentralization is a tool that can be handy in solving some not so good aspects of human nature. For example, greed at the expense of others.

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Yep.
I must admit, this rule by code not by humans, attracted me to this space. I thought code could be fair and just, more often then a human. But we have limitations, so what we build has limitations. So we need to build code better, so it can function beyond our limitations. Our initial efforts can’t differentiate between trade and theft, but it’s not the codes fault, it’s the code creator.

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Absolutely well said! The code creator has to do a better job, continuing practicing the right thing.

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The issue is that CZ ALONE has the sole authority to halt BSC.

Which is just ridiculous because there's no point in it even being a blockchain.

May as well just be a database on Binance's servers.

At least it would be more efficient...

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I read your article. You are right that centralization means depending on the malevolence of the ruling party/parties. The big mistake on Steem was the same issue. The leader was malevolent, until he was not, and this explains the passion people feel for decentralization. Rule by code eliminates human corruption, but we still need work to help us with human error.

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I think it was bound to happen and it was obvious when most people can't even run witnesses for BSC. It's all an internal job and I am just hoping that they don't do too much out of line.

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Yes, in centralized systems you rely on the malevolence of the King or Kings. These systems can run well if the King is good. But if the King is bad, it’s another story.

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