“At the end of the day, the average person doesn’t actually care about decentralisation or centralisation,” says a former BitMEX CEO.
Decentralisation, the concept of distributing decision-making and control, is a central tenet of Satoshi Nakamoto’s original vision of Bitcoin in 2008. Even as these values have existed way before the digital assets industry sprung up, former CEO of crypto exchange BitMEX Arthur Hayes says that everyday, mainstream users would rather prefer something else.
While it’s a known fact that decentralisation is a core component to what made crypto what it is today, the everyday person prefers an easy-to-use digital asset platform rather than a decentralised one, according to Hayes.
“[A] good price, good product, good user experience,” he said, “That’s all the majority of you will care about and will care about in the future.”
If it’s not your keys, is it not your crypto?
To refresh, digital assets are decentralised as they don’t require someone else, like a bank, to mediate with maintaining ownership or conducting transactions with their own assets. The adage “not your keys, not your crypto” is popular amongst those who adhere to the decentralised aspect of digital assets, using non-custodial wallets and decentralised exchanges to engage in the world of crypto.
Contrasting to a decentralised system are centralised institutions, where such firms offer services to mediate in providing frictionless access to crypto-related products and services. In situations like this, owners of assets will hand over their private keys to these mediators so they can easily use crypto.
While the key benefits of decentralisation, such as pure ownership of one’s own assets and privacy, have drawn many users to adopting crypto, Hayes claims that millions of people would rather rely on centralised services as they make crypto more accessible to the mainstream.
There’s already plenty of major, centralised exchanges like Coinbase and Binance that have made it easier for people to own crypto without requiring them to navigate the complex world of financial sovereignty through crypto entirely on their own. But at the same time, crypto crashes have pulled attention to centralised actors like FTX, and the company’s apparent mismanagement under the leadership of former CEO Sam Bankman-Fried.
Despite the potential dangers with centralised entites, Hayes says, people can “have meaningful work, save some money, [and] provide for their family,” instead of just purely running their own finances themselves. As such, Hayes suggests there’s a lack of demand for decentralised crypto products.
So what can bring crypto to the mainstream?
Rather than decentralisation as an attractive factor to drawing people to crypto, Hayes points out that inflation would end up bringing crypto to the mainstream, where the phenomenon can “create speculators out of everyone.”
As of late, people have been turning their heads to crypto as a hedge against the traditional financial system. Although they may not be directly correlated, commentators have noted that crypto prices shot right up, after March’s collapse of Silicon Valley Bank – the second-largest failure of a bank in US history.
Given this, Hayes predicts that an eventual mass adoption of crypto may likely be determined by factors outside of the sphere of crypto – such as inflation, and observed banking crises.
While fear can be a driving factor to get people to shift to protect their assets digitally, we may not see total adoption of crypto. Not everyone has a “desire to run their own finances,” irregardless of learning curve, he said.
Even though we may not get the fully automated decentralised future that some crypto enthusiasts want, Hayes believes that the balance between centralisation and decentralisation can develop into something for everyone.
“Hopefully, there [are] more people working on solutions that make that easier to use so that competition is a little bit more fair.”