Vitalik Buterin On Centralized Exchanges – ‘Burn In Hell’
In an interview with Jon Evens at TechCrunch Sessions: Blockchain 2018, Vitalik Buterin issued a scathing criticism of centralized exchanges. Buterin has negative opinion about cryptocurrency exchanges mainly because of the custom of charging exorbitant amounts of money ($10 million to $15 million) in coin listing fees. Buterin also pointed out that the main purpose of exchanges is to bridge the fiat world, which has only “centralized gateways”, and virtual currencies.
As usually is the case, Buterin did not hesitate to use strong words, which expressing his disappointment about the demands made by exchanges. Buterin said
“I definitely hope centralized exchanges go burn in hell as much as possible.”
Furthermore, Buterin stated that crypto-to-crypto exchanges offer clear edge, from a user’s point of view. Ethereum co-founder stated that such exchanges act as a channel, transferring cryptocurrencies from one address to another but in different two different forms. Buterin, however, highlighted the challenges faced by decentralized exchanges. One of the major problems faced by decentralized systems is user authentication.
In a case where a user loses private key, then the funds stored in the wallet is irrevocably lost as there is no central authority, which could recover or reset the password. Another issue faced by decentralized environment is that there is no possibility of arbitration even when there is a small disagreement between users.
Disagreements between groups in a decentralized environment ultimately blow up, leading to hard forks. Buterin stressed the importance of forming right communities where each member plays a major role:
“Growth of the communities definitely depends on what the earliest members believe. I think it is something where we do make a deliberate effort to basically promote the right values and attract the right people both in an inclusive sense and in an exclusive sense.”