This is what people are failing to understand regarding the current crypto crash and everything causing it, it’s been obviously clear to us. People still don’t want to listen and keep thinking that the entire crypto industry is crashing because CeFi is failing and crashing. Crypto was built for decentralization not centralization, at the beginning it will be centralized because a project doesn’t spring up from thin air. Someone will have to start it and build it first before leaving it to the entire community to run. Just like Satoshi Nakamuto did, built it, then left it with the community to run. About 14 years after, see how it’s still striving and not crashed.
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But centralized finance has a lot of limitations and a lot of disadvantages because it’s obviously centralized and controlled by one person and entity, no one except them has the power to make any decisions in that project. But it becomes a bigger problem when that centralized entity has a big control in the crypto ecosystem. For instance let’s say Satoshi Nakamuto wasn’t anonymous and the whole world knew him, and he kept on being relevant, imagine the amount of influence he is going to have. A word from him can pump or crash the crypto market, but I guess that wasn’t his vision so he left anonymously. This is one of the reasons I still say that Satoshi Nakamuto saw way ahead of the future.
But today, we have a lot of people that want to be the next Satoshi Nakamuto and have the influence in which they can use to their own advantage. Sam BankMan Fried before FTX collapsed had great influence in crypto, named one of the richest and the youngest crypto billionaire. CZ, The CEO of Binance, is another influential man in the crypto space, look at what his tweet about FTX and FTT caused to the FTT token, and look at what FTX collapse caused to the entire crypto market. This just shows how extreme centralization can affect crypto, especially when it has a high influence.
Imagine what will happen to the crypto ecosystem of Binance crashes, the crypto market might lose more than 50% of its value, because Binance has a big influence in crypto, and CZ is currently the king of crypto. But this doesn’t mean that it will be the end of crypto, it might crash the price, the centralized ones will die off but the decentralized ones will still survive, it might take time to recover but it will continue and strive with time.