Cyber Capital founder and CIO Justin Bons ignited a fiery debate on Twitter today, claiming that Bitcoin (BTC), XRP, Binance Coin (BNB) and Stellar (XLM) are not true decentralized finance (DeFi) projects.
Bons argued that while BTC has played a crucial role in the rise of cryptocurrencies, it is not capable of handling complex financial products.
Furthermore, he asserted that BNB, XRP and XLM are centralized due to their permissioned blockchain architecture.
In contrast, Bons listed several projects, including Ethereum (ETH), Cardano (ADA) and Polkadot (DOT), which he believes genuinely embody DeFi principles.
The centralization of certain cryptocurrencies, according to Bons, stems from their permissioned blockchain architecture. Permissioned blockchains require users to obtain permission to participate in the network, and the network's rules are governed by a central authority or a select group of entities.This structure contrasts with permissionless blockchains, where anyone can join the network and participate in its operation without needing authorization.
Bons' tweet sparked a range of reactions from the crypto community. Addressing the Solana (SOL) project in a follow-up tweet, he stated that although it is technically decentralized and permissionless, it has made dangerous trade-offs in security and scalability to achieve those attributes.
Centralized cryptocurrencies can be more susceptible to censorship, manipulation and control by centralized entities, undermining the core principles of decentralization and trustlessness. However, proponents of centralized cryptocurrencies argue that they can offer increased efficiency, regulatory compliance and better governance.