Is Decentralization In Cryptocurrency Fast becoming a Myth?

Recent research by Token Analyst has questioned the significant motives behind digital currencies, explaining how cryptocurrencies have deviated from the founding principles that attracted enthusiasts to it in the first place.

Could Decentralization be Truly Achieved?

The founding principles and core benefits offered by blockchain and digital currencies can be summed up in one word: decentralization. However, at this rate, those principles might just become veiled tenets, and ‘decentralization’ itself a buzzword if something is not done to correct the nascent imbalance shrouded in the crypto world.
Bitcoin and other altcoins’ love affair with the world is built on the premise of no particular central authority, a breath of fresh air and freedom: thus eliminating the need for middle-men, trust, and emphatically shelving the need for capitalism. As could be seen with United States’ isolation of the Iran government in international trades, power residing with central figures allows easy and bias manipulation of financial and economic movements. A decentralized world is supposed to spit out every traces of monopoly because it simply should have no way for existing.

However, the idea of monopoly is still not completely extinguished even in the decentralized world we are patiently fashioning, according to Token Analyst’s published findings. The recent study has revealed that an astonishing average of 78% of all coins now is held by the top 20 wallets; provided the top 50 cryptocurrencies by trading volume are used as case studies. What is more surprising? 16 out of the 50 selected for case studies have their 20 biggest wallets holding more than 90 percent of their total token supply. Talk of no monopoly!
This only calls into question the reason behind the clamor for cryptocurrencies to begin with. As Ethereum founder, Vitalik Buterin once said in a blog post; decentralization should simply be “a blockchain’s entire raison d’être” – that is, its major reason for existence. If this is not guaranteed, then of what use are digital currencies then?

Crypto Fundamentalists Might Not Be Believers

The new findings have also questioned the ‘belief’ of the very early investors of high profile projects such as Ripple XRP, Binance Coin, Maker et al., who also hold a significant portion of the total supply. According to Prasad of Token analyst, the fact that an average of almost 80% of total supplies is held in the top twenty wallets only goes to show that most holders of the coins are only keeping for speculation, rather than for use on the network.

“If 20 addresses (including the token team and exchanges) own 80% of the tokens, this tells me a few things: 1. Pre-sale investors got in early at large discounts; 2. No one is interested in using the network and the tokens are used purely for speculation; and 3. future governance (crypto buzzword) will be at the beck and call of few,” Prasad lamented.

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