Most crypto tokens lacking decentralized blockchain networks: Experts

Most crypto tokens lacking decentralized blockchain networks: Experts

Industry leaders and crypto experts have recently pointed out that apart from Bitcoin (BTC) and Ethereum (ETH), none of the crypto tokens are running on a decentralized blockchain.

Reportedly, Terra halted its blockchain network recently when its crypto token UST stable and Luna coin started crashing. Similar outages were seen in another altcoin network Solana in the last year.

Incidences like this have raised the question of whether cryptocurrency’s blockchain technology is actually decentralized.

With rising competition, several new crypto companies are looking for quick scalability over security and decentralization. As a result, the blockchain network of these new companies have become vulnerable to cyber and network attacks and DeFi (decentralized finance) hacks.

Sathvik Vishwanath, CEO and Co-founder of Unocoin, said that blockchain has the ability to operate in a decentralized way but it does not implicate that blockchain always is decentralized. Therefore, if all the nodes and computers connected are operated by one company it is mostly centralized.

He further said that in Terra’s case, the required blockchain was running and obviously had some kind of management switches placed in a way where they could turn it on and off. This is certainly not like BTC, where the network is fully decentralized. When things didn’t go in a planned way, Terra decided to halt blockchain in order to bring stability.  

Sharat Chandra, Vice President - Research & Strategy, EarthID, said that according to Vitalik Buterin, Ethereum’s founder theory of scalability trilemma, one can principally pick only two from decentralization, scale, and security to build and develop a blockchain network.

He further said while BTC and ETH have the most secured and decentralized blockchain networks, all other new crypto tokens have ignored decentralization for scalability, which can lead to possible network threats, DeFi hacks and attacks.

Chandra explained that Terra also emphasizes on scalability more, rather than decentralization. It uses DPoS (Delegated Proof of Stake) mechanism which enabled validators to halt the network when UST stable prices plummeted.  

Source Credit: https://www.thehindubusinessline.com/info-tech/blockchain-network-of-most-crypto-tokens-are-not-decentralised-experts/article65420148.ece