Justin Bons , the CIO of Cyber Capital, ignited a heated debate on Twitter this morning, claiming Bitcoin (BTC), XRP (Binance Coin) (BNB) Stellar (XLM), and Binance Coin are not decentralized finance projects.
Bons said that although BTC played a key role in the rise and development of cryptocurrency, it was not able to handle complex financial products.
He also claimed that BNB, XRP, and XLM were centralized because of their permissioned Blockchain architecture.
Bons, on the other hand, listed several projects including Ethereum (ETH), Cardano(ADA) and Polkadot(DOT), which he considers embody DeFi principals.
Bons believes that the centralization of some cryptocurrencies is due to their permissioned Blockchain architecture. Permissioned Blockchains are those that require users to get permission before they can join the network. The rules of the network are also governed by the central authority.
This structure is in contrast to permissionless blockchains where anyone can join and participate without authorization.
Bons’ tweet was met with a variety of reactions by the crypto community. In a subsequent tweet, Bons addressed the Solana project (SOL), stating that, although technically decentralized and permissionless it had made dangerous compromises on security and scalability in order to achieve these attributes.
Centralized cryptocurrencies are more vulnerable to censorship and manipulation by centralised entities. This can undermine the fundamental principles of decentralization, trustlessness, and transparency. Proponents of centralized cryptocurrencies claim that they offer greater efficiency, regulatory compliance, and better governance.