One of the key properties of Bitcoin and crytpcurrencies in general was that of decentralization. The thought was that by keeping things decentralized, you can keep them away from corruption and bad actors and have a system that doesn’t require trust or third parties. Unfortunately, that key tenet of crypto seems to have been lost for the most part. Many top coins at the moment are highly centralized if not fully centralized. Some make promises to one day be decentralized, and others seem to not care at all.

Even then, we have coins on a proof of stake system or planning on moving to such a system. And while on paper it may seem like a good idea, these systems have not been proven to be able to resist centralization. With proof of stake, those who own the most coins have the most ability to receive rewards and control the network. So while there are some technical properties that have been proposed that will supposedly take care of this, it seems very obvious that proof of stake is a centralizing force at a fundamental level and requires unproven work-arounds to make it less so.

But with all that said, it brings me to Monero. One of the few proven coins that is still highly focused on decentralization. Of course, Monero is a privacy coin and that makes it highly reliant on decentralization. One day there could be a move to ban or regulate privacy coins, and any that are not fully decentralized will be at risk. So Monero has good reason to be so focused on keeping decentralization a priority. However, virtually every crypto project is at risk if it becomes too centralized, so the fact that Monero puts such a premium on this aspect is one of the many reasons I like it for a long term investment. It stays true to the original goal of cryptocurrency.







Recently, Bitmain, a producer of mining specific hardware launched their Antminer X3 which was built specifically for the privacy based hashing algorithm called Cryptonight. Monero uses this algorithm but one thing Monero does is launch slight tweaks to its algorithm every 6 months or so. The purpose of this is to make it unprofitable for a group with deep pockets to invest a huge amount of money into Monero specific mining hardware such as the X3. If this was possible, a small number of miners could start to take over a majority of the hash power from the more decentralized core of miners using consumer grade hardware like video cards.

And this is exactly what has happened with the Antminer X3. It was launched with a price tag of nearly $12K, putting it out of the reach of consumers and also producing better performance than consumer grade mining hardware. However, Monero has already announced that their algorithm will be changed soon and the X3 will not be able to mine Monero when it is shipped. So the protocol of Monero changing their algo to resist centralization has worked exactly as planned.

Overall, the idea of decentralization seems to have been lost somewhere along the way when it comes to cryptocurrency. But I am happy to see Monero still keeping this idea strong, and it is one of the reasons I am a long term holder and strong supporter of XMR.