This is what I do everyday:
I take the laptop out of my bag and check Coinmarketcap while my Uber comfortably takes me to my office.
It has been my daily routine. And today, as I opened my laptop, I began wondering:
What if there was an option to sort currencies in Coinmarketcap? Perhaps find out if a coin is centralized or decentralized?
And that is what led me to write this article.
You see, even though there are hundreds and thousands of cryptocurrencies, very few of them are actually centralized. Coinmarketcap doesn’t list them. This led me to research further and find currencies worth sharing here.
Defining Centralized Cryptocurrencies
Centralized, as per Dictionary.com, means “to bring under one control.” In the crypto world, it means a coin is controlled by a single company – a single authority.
For example, Ripple’s XRP is a centralized cryptocurrency. Here the private company based out of San Francisco makes the decision. This is unlike Bitcoin and Ethereum, in which the community forms the decision.
Moment you think as an investor, you can see the advantages and disadvantages of centralized cryptocurrencies. The advantage, however, is there is an entity that takes responsibility – responsibility to please its investors – create more partnerships – and build a working product that is widely accepted.
And what is the biggest disadvantage? It is this same company – as it controls the outcome of the project – its present – and its future.
And with that said, we have gone through the top 15 cryptocurrencies listed on the Coinmarketcap – and discovered 5 centralized coins that you should know. It is arguable as some of these currencies are going to be decentralized very soon.
Top 5 Centralized Cryptocurrencies
Started in the year 2012, Ripple’s XRP is one of the top centralized currency in the market today. It has partnered with banks and governments to make global payments easier.
Going by the market capitalization, Ripple holds the third spot after Bitcoin and Ethereum. Here’s why it is centralized:
Each Unique Nodes List (UNL) supporting the Ripple network is actually selected by the Ripple company. And we believe it will remain that way for the years to come.
Considered one of the most successful cryptocurrency in Asia, NEO seems unstoppable for a number of reasons. Many in the community believe it a centralized & decentralized blockchain.
However, right now, it is centralized. As per this post:
I was so disappointed to find out that NEO was so incredibly centralized. Investing in NEO was akin to investing in a number in Da Hongfei’s personal database. I tried to get the word out by writing a couple blog posts but NEO’s investors insisted that I was just “spreading FUD” and that NEO was worth as much as or even more than Ethereum!
Spreading FUD? I don’t think so. In fact, all the seven trusted nodes across the network is controlled by the NEO team. Basically, you are trusting NEO council to maintain and develop the blockchain.
The team, however, is working on this centralization issue – and may come up with a solution to please its community. For now, NEO remains centralized.
By definition, and as per the website, Cardano is a decentralised public blockchain and cryptocurrency project and is fully open source.
Yet, for now, we label it centralized. And that’s perhaps because there is no working product yet (except for the wallet).
Eventually, if what is said in the roadmap is executed, Cardano (ADA) will be a decentralized public blockchain.
Note: As per the Shelley roadmap, Cardano will be decentralized before Q2, 2018.
IOTA, powered by Tangle, is considered revolutionary and centralized for many reasons. In fact, it is interesting how IOTA’s developers once said that none of the blockchain is truly decentralized. And IOTA falls under that category.
The devs even considered Bitcoin centralized as it is owned by mining farms.
When it comes to IOTA, there are plans to move to a distributed coordinator by early 2019 – to make it decentralized.
This is a bit tricky.
NEM’s node software is not open-source. It has been written in Java, and currently – from what we know – the entire Network Infrastructure Server (NIS) will be rewritten in C++.
In simple words, NEM will be decentralized the moment its node software is open-source.
For now, although many may argue, NEM is centralized.
Over To You
So you saw the top 5 cryptocurrencies that are still controlled. And that are dozens of them as you scroll through the Coinmarketcap.
Question is: which one is your favorite? Let us know through the comment section below!