>I don't think the promise of Bitcoin was ever that there would be no exchanges, only that no one would be beholden to any given provider. As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.

Can't you see this defeats the whole purpose though? By this logic, traditional banks are also decentralized because you can also take your money out and go to a different bank. The word "decentralized" has no meaning in crypto parlance, it means whatever the speaker wants it to mean at any given time. And at least banks are FDIC insured, when a crypto exchange loses all your money then you can't really pick up your keys again because everything is just gone.

>Can't you see this defeats the whole purpose though? By this logic, traditional banks are also decentralized because you can also take your money out and go to a different bank.

The point isn't that centralized exchanges are decentralized, but that the network is decentralized in spite of the existence of centralized exchanges. Crypto provides financial democratization by way of an open permissionless financial network. Large entities can't collude to lock in customers or lock out competition. Centralized exchanges offer convenience over the base network and so they see a lot of use. But your freedom to transact with the network can't be taken away by centralized players. There is no analogous "base network" when it comes to bank transactions.

But that's also false. In practice the network isn't decentralized at all. This was very obviously the case since the very first bitcoin mining pool formed in 2010. The advantages of re-centralizing are far too great, and the whales have a clear financial interest to put themselves in charge of the network, so that's what they do. Any system that gives you more power because you put more starting cash into it can't be described as "providing financial democratization", so that characterization is just wrong. It's also wrong that they can't take away your ability to transact, the miners absolutely have the ability to block your wallet or ignore your transactions.

And I hope you can see the uselessness in creating a system that fits some vague definition of the word "decentralized" while nearly everyone who uses it just interacts with the centralized services on top of it, because maintaining the illusion of decentralization is so difficult and pointless that nobody actually bothers with it. Maybe it's "decentralized" if you're a whale and you want to capture large portions of the market with fraud without anyone being able to stop you. For everyone else, it's just not. The "base network" here is just for show and marketing purposes, it adds nothing of value to any real legitimate activity.

I don't see a substantive criticism here. I agree that the term decentralized is a misnomer, if only because the term is so vague. Democratization is the term I use to describe crypto. The question is whether powerful entities can interfere with the expected behavior of the network against the will of users. I don't see that this is the case. Sure, miners are in a position to ignore transactions, but doing so would require a high level of coordination that doesn't go against the ideal of "democratization". Yes, if everyone is against you, you're screwed either way. But crypto raises the level of coordination required for such an act to the point of implausibility. Besides, if such a coordinated attack against an individual was in progress, we would likely see hashrate reorganize to short-circuit the attack. This is democratization.

And again, using that term is wrong, because by definition these networks only give more power to those who have more money. Proof-of-work and proof-of-stake are intentionally designed to work that way. There is no democratization or fairness. The level of coordination isn't implausible either, it's already happened several times already, and there's nothing actually stopping it from happening again other than some vague "trust" that the system is going to work in a way that crypto promoters say it will.

Just to make this clear: If you personally don't have a vote then there's no democratization. You don't have one if you don't run a full node, which it's very likely that you don't. And if you do, the hashpower (i.e. voting power) of the full nodes you run is determined by how much money you invest in mining hardware. It's not democratic in any possible way you look at it. I'm not just making this up, crypto developers will readily tell you that the system is purposely designed this way to not be democratic.

The premise of your argument is incorrect. One does not need to participate in securing the network for the network to represent the "democratization of financial power". Democratization doesn't mean "voting", it means something like make equally accessible. What crypto does is make financial transactions equally accessible. The method by which this is accomplished (proof of work/stake) isn't equally accessible, but that is a tangential concern to the accessibility of executing financial transactions. What matters is the miners can't unilaterally interfere with the expected function of the network. Further, that the coordination required to interfere with the expected function is implausible and/or prohibitively expensive.

>The level of coordination isn't implausible either, it's already happened several times already

For instance? And what may have happened in the early days of the network is irrelevant to what is possible today.

>but that is a tangential concern to the accessibility of executing financial transactions

No, I disagree. It's exactly the same, because without that concern your transactions can be deprioritized or blocked. Miners can absolutely interfere with the expected function of the network, because it's entirely them who determine what the expected function is in the first place. There are no other systems in place to guarantee the functioning of the network and as a user (not a miner) you have no say in the matter at all. They do whatever they want and you're forced to accept it unless you can afford to buy huge amounts of mining hardware and take over the network yourself. I believe I addressed this all already, it's not democratic by any definition of that word or in any way you could ever possibly look at it. The original bitcoin whitepaper proposed that many more people would be running full nodes and (correctly) stated that the security properties of the system would come from this, and if that ended up being a realistic way to set the system up then maybe you could have said it was more democratic. But this didn't work out in practice, and it's been very obvious since 2010 that it would never work out that way for multiple reasons, one being that the financial rewards from re-centralizing into mining pools are far too great to pass up.

>For instance? And what may have happened in the early days of the network is irrelevant to what is possible today.

Both bitcoin (in 2013) and ethereum (in 2016) have reverted transactions that the miners didn't agree with. Any statements from them that the network is "immutable" or "decentralized" or "democratic" is simply a lie. Nothing has actually changed since the "early days", the conditions for them to do it again are still there and will likely always be there because this is how the network is fundamentally designed to function, based on a consensus of those who have the most resources available to them to mine. For a smaller coin, it may not even be possible to tell that this is happening, because blocks that the miners all agree they don't want to process can simply be dropped with no log of that happening.

Now, if you could legally require that cryptocurrencies need to set up a legal entity that gives a certain level of democratic control to its stakeholders then that's probably the only realistic way you could change things, but I doubt that would ever happen because crypto enthusiasts don't seem to care much for laws or regulations. And in any case, doing so would not be an innovation, it would still have all the other fatal flaws of cryptocurrency. Best case scenario, it would just be moving back into a poor approximation of a credit union, which is something that already exists.

>Miners can absolutely interfere with the expected function of the network, because it's entirely them who determine what the expected function is in the first place

Like I said, the coordination required to interfere with the expected function is implausible and/or prohibitively expensive. You have given no reason to think this isn't true. There's a common argument that goes like: "X can easily happen, all we need is for everyone to do Y". Call this the fallacy of implausible coordination. "We can break the two-party system, we just all need to vote third party". Your comment reads like this.

>Both bitcoin (in 2013) and ethereum (in 2016) have reverted transactions that the miners didn't agree with

I'm aware of the DAO hack and transaction reversal for ethereum, but what exactly are you referring to for bitcoin? In the case of ethereum, they reversed the transaction because the miners did agree with it. But technically, the transaction wasn't reversed, the network was forked. The original network still operates as ethereum classic. If you get enough people together you can change the past on your alternate chain. But that is not an example of a transaction being reversed.

And please, keep any further replies to focused arguments and free of ranting.

It’s a is ref to https://github.com/bitcoin/bips/blob/master/bip-0050.mediawi... however I don’t think that’s really in the same class to the Eth chain split. It was a db bug, it got fixed, “infra” bugs. Eth was a forced onchain state fix. “Business logic bugs”.

It is disingenuous to point to the 2013 incident and say this proves a lack-of-decentralization myth.

> Both bitcoin (in 2013) and ethereum (in 2016) have reverted transactions that the miners didn't agree with.

The miners don't agree with Ethereum switching to Proof of Stake, and yet, watch what happens this autumn. Important insight: The users control the network, not the miners. Specifically, it's the users who would be buying the miner's freshly minted coins.

The DAO fork was not driven by the miners.

> The miners don't agree with Ethereum switching to Proof of Stake, and yet, watch what happens this autumn.

Yes, this time it will really happen. No way it will be delayed again, no sir.

Not exactly the same, because with the US Dollar, every bank can be ordered to freeze your assets.

This may be considered a feature, but the same is true for the Ruble, or the Real. Having assets on the blockchain means you self-custody them in a more portable way (similar to cash), while still having them in a digital form.

It is the same. Crypto exchanges can also freeze your assets when you hold them in that exchange. And actually this is a good thing, the accounts of fraudsters, thieves and scammers should absolutely be frozen and confiscated. Crypto companies are trying to promote this idea that because they've sprinkled some crypto magic on their banking product, they don't have to follow laws, and by doing this all the fraud will just all suddenly disappear for no clear reason. That overwhelmingly isn't true. Don't let them get away with this.

"Self-custody" in crypto is also a lie, there's no such thing. All activity on a blockchain is completely dependent on the miners to run the network.

Instead of a court, in crypto, the operators of a coin decide on what happens to your funds. They can freeze your assets to make their assets seem more valuable, or they can agree to create an infinite amount of currency (ex: dogecoin)

>As long as you can pick up your keys and seamlessly start trading on a different exchange, that part of the crypto world is not centralized.

I once asked a friend who had signed up to some crypto exchange "Do they just give you your keys when you sign up?". They replied, "What keys?" Eventually they found it. But it's not like they educate the user.

The cool thing is that you can use a centralized exchange and not even know about what keys are, or use the network as it is intended and not rely on a centralized entity.

What's bad about having more options?

This is bad because who ever controls the keys controls the coins. So really for all these clueless users, the exchange owns all the coins and you can’t prove otherwise.

And they don’t bother educating the user. Or suggesting best practice. That’s not in the users favour.