Wendy McElroy: Here, There Is No State

The core innovation of cryptocurrency is decentralization—the diffusion of functions or power across a broad network. The decentralization of crypto is what yanked financial control away from concentrated authorities, like central banks, and into the hands of individuals. Yet some people argue that decentralization does not exist in crypto. The argument comes from a tension between the original vision of Bitcoin and the hundreds of cryptocurrencies, the hundreds of communities that have arisen. On one hand, currencies like Bitcoin have no coordinated authority, no central management, and there is no one point at which they can fail. On the other hand, many vehicles of crypto are businesses run by a small number of people in a specific location, which bow to government dictates. In short, the technology is decentralized but many expressions of it are not. Adding to the confusion: some of the most prominent actors are centralized exchanges, like Coinbase, that resemble nothing so much as regular financial institutions in their reporting requirements and other demands. They are the type of institution that crypto was designed to avoid.

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