At a recent ETHDenver event, Consensys CEO Joseph Lubin shared his vision of the generational shift in attitudes brought about by decentralization.
He believes that the world is on the verge of a major transformation as the current financial system collapses and a new one based on decentralization and blockchain technologies emerges.
According to Lubin, this will lead to a “supercycle” in the crypto industry as monetary systems evolve and the younger generation is more open to innovation and less tied to outdated systems.
He said: “The momentum is picking up, and it’s unstoppable.”
The Necessity Of A Decentralized System
When he was asked what could be the catalyst for the next cycle, he answered: “We are in this 4th turning, and we are ready for a new system of the world. The other way of thinking about it is that it’s a monetary super cycle, where the monetary systems of the world reach and end of life essentially, basically because of interest, and there’s too much debt in the system because certain generations broke the monetary system and other elements of the financial system.”
In his view, the current financial system is centralized and controlled by entities such as governments, banks, and corporations that are only interested in their own interests, not the interests of the people. This system is inefficient, prone to corruption and crises, referring to the 2008 financial collapse that inspired Satoshi Nakamoto to create Bitcoin.
“Satoshi invented decentralized trust as opposed to centralized trust. We’d never seen decentralized trust on the planet before.”, said founder.
Lubin emphasized that Bitcoin paved the way for the creation of Ethereum, which he co-created with Vitalik Buterin. He emphasizes that Ethereum is a platform for innovation, as it supports a large and active community of developers and projects in various industries.
The Issues Of Centralization
The founder also discussed the recent launch of spot Bitcoin ETF. In his opinion, this launch is a positive development in the industry, but he is concerned about the centralization of Bitcoin that may be caused by these instruments.Lubin says they could weaken incentives for people to hold and use Bitcoin. In addition, it could increase the power of intermediaries and custodians who manage funds.
The CEO is not worried about the possible impact of a spot Ethereum ETF. He believes that the blockchain community is more involved and will invest their ETH in the protocol, participate in its regulation, and receive rewards, rather than sell them for fiat money.
I asked Sebastien Guillaume, co-founder of Paima Studios, to comment on some of Lubin’s words.
“During the ETHDenver event, Joseph Lubin said that the world is on the verge of a major transformation as the current monetary system is collapsing, and a new one based on blockchain technology and decentralized protocols is emerging. What do you think about Lubin’s words, and what is your opinion on this point?”
“Unlike last cycle which included a large DeFi focus, this cycle is a lot more about experimenting with use-cases especially airdrop farming and so TVL has been lagging behind other indicators so far this bull market. Monetary transformation has been a lot more focused on the investment angle then DeFi usage, whereas decentralized protocol emergence has been more been primarily fueled by excitement over distribution of protocol ownership as opposed to changes in the current monetary system in my opinion. It could very well be that these two parallel tracks meet, but I think right now these narratives feel disjoint and will probably continue to feel disjoint until either these new protocols finish building stronger connections to DeFi or investors feel more confident in putting their funds into DeFi despite the cascading effects of blowups of centralized entities in the last bullrun”
The Value Of Decentralization
Decentralization plays an important role in the crypto industry because of its numerous advantages. Decentralization eliminates the need for intermediaries such as banks or governments, giving people full control over their finances. It also allows for secure and tamper-proof transactions that are not dependent on intermediaries. In addition, decentralization increases security in the world of cryptocurrencies. Their networks are less vulnerable to attacks due to their distributed nature. Without a single database, they are more resistant to cyber threats.
Decentralized applications have long been used by companies to increase their user base. Today, the most popular Dapps are DeFi projects such as decentralized crypto exchanges (DEX). For example, Uniswap, Whiteswap, Pancakeswap, and others. They allow individual users to trade cryptocurrencies directly with each other without an intermediary.
Decentralized applications have several common use cases. For example, blockchain-based games allow players to trade game assets as irreplaceable resources. Decentralized social media platforms give users control over their data. DApps are even used in medicine. They securely store and share patient data, facilitating interaction between medical professionals.
Summary
As the world is constantly evolving, so is the need for decentralized systems that prioritize user privacy and security. Cryptocurrencies are an important step towards a fair financial future where power is not concentrated in a single hand. Decentralization is not only about introducing a new technology, but also about changing the structure of monetary systems and the future.