Saw a comment “If crypto is reliant on Binance to survive, then it is neither decentralized nor useful”

The phrase "If crypto is reliant on Binance to survive, then it is neither decentralized nor useful" touches upon two important concepts in the world of cryptocurrency: decentralization and utility. Let's break down this phrase and analyze its implications:

Decentralization:
Decentralization is a fundamental principle in the world of cryptocurrency and blockchain technology. It refers to the distribution of control, authority, and decision-making power away from a single entity or central authority. In a decentralized system, no single entity has full control over the network, ensuring greater transparency, security, and resilience against single points of failure.

The phrase suggests that if a particular cryptocurrency or the broader crypto space is heavily reliant on a centralized entity like Binance, it undermines the core principle of decentralization. Binance is a centralized cryptocurrency exchange that facilitates trading and provides various services related to cryptocurrencies. Depending heavily on Binance for survival could imply that a significant portion of the network's activities, including trading and transactions, are controlled by a single entity, which contradicts the ideals of decentralization.

Usefulness:
For a cryptocurrency to have value and be considered useful, it needs to serve a purpose beyond just being a speculative asset. Usefulness can encompass various aspects, such as enabling efficient and secure transactions, supporting smart contracts and decentralized applications, providing solutions to real-world problems, or offering a store of value.

The phrase suggests that if a cryptocurrency relies solely on a centralized exchange like Binance for its survival, it may not be providing sufficient utility. This is because its value and functionality seem to be tied to the services offered by Binance, rather than being driven by the inherent benefits of the cryptocurrency itself.

In summary, the phrase emphasizes the following points:

• Decentralization is compromised: Heavy reliance on a centralized entity like Binance undermines the decentralized nature that is often considered a cornerstone of the cryptocurrency space.
• Utility is questionable: If a cryptocurrency's survival depends on a centralized exchange, it raises concerns about the cryptocurrency's ability to provide independent value and utility beyond the services of that exchange.

However, it's important to note that while the phrase makes a straightforward statement, the reality can be more nuanced. Many cryptocurrencies do start their journeys with exchanges like Binance, but over time, they may become more decentralized and find broader use cases. Decentralization and utility are complex issues that can evolve as the technology and the ecosystem around cryptocurrencies develop.

Are we all actually using crypto as a savings account with high risk?