One of the greatest features of the blockchain is its ability to be decentralized. The network doesn't function under a central authority, and power is distributed among (hopefully) thousands of nodes worldwide.
Decentralization is one of the fundamental pillars of the core technology and many of the crypto solutions built on it.
However, complete decentralization was not necessarily the most practical option. In fact, buying Bitcoin was an almost daunting task in the beginning. In many cases, you had to send the money to a third party, wait for the third party to receive it and register it in a wallet and then be able to operate. Or you could mine it, which was definitely more accessible back in the day but wasn't necessarily user-friendly.
The industry needed more people to be able to enter, and centralized exchanges, with bank accounts and much more immediacy, began to rise.
But now, there are decentralized options that solve these pains. On ramps allow using credit cards to buy crypto in a decentralized way, and DeFi wallets allow users to have full custody of their assets at all times.
The recent case of FTX, a centralized exchange valued at more than $30 billion at the beginning of the year, is one of many centralized entities that have had problems.
Only in June, a few months ago, Celsius, a centralized protocol for collateralized loans, also collapsed, taking the funds of all its users.
Just a couple of days ago, the Binance Smart Chain (BSC), part of the centralized exchange Binance, suspended trading after discovering an exploit. And while this may seem positive at first glance, the fact that an entire blockchain network can stop processing transactions due to a unilateral decision without consensus is worrying.
But let's not think the crypto industry is the only one affected by centralization. Let's remember that crypto emerged in the first place as a criticism of the ultra-centralized traditional financial sector represented by banks that could cause a significant financial crisis - like the one in 2008 - and disappear with funds like the Stanford Financial Group did it.
Custodial options are not necessarily the solution that crypto needs to get more support, and it's actually quite the opposite.
With access to a DeFi wallet - created in a couple of minutes - no third party has control of the assets beyond the user. Nobody can use the funds to lend them to another company, obtain returns with them or spend them on anything the CEO of a company considers.
That's what a trustless platform is all about, you don't have to trust anyone but yourself to keep your funds safe.
To maintain security and transparency and have the growth that we want to have in the industry, we must return to the initial proposal: decentralization.
This is where the industry needs to provide the ease of experience centralized options have while maintaining blockchain's decentralization, trustlessness, and non-custodial benefits.
Creating decentralized tools will help the crypto community and the non-crypto community that's now looking from the sidelines and wondering if it's the right time to enter, to get into the future of the internet and finances. Real decentralization is probably what will power the next bull cycle.