Blockchain projects have enjoyed remarkable success since Bitcoin hit the market largely because they are decentralized in nature. The entry of institutional investors into the nascent industry, and securing mainstream adoption has been the most talked about topic amongst cryptocurrencies all year long.
However, Jackson Palmer, one of Dogecoin’s creator believes that there could be a counter effect of the much sought after mainstream adoption. Palmer is of the opinion that institutional investors may not only adopt cryptocurrencies but also invade the infant industry.
The Problem of Institutional Investors
In Palmer’s opinion-article published on November 5, he stated that although the entry of institutional investors into the blockchain industry has been exciting, these large institutions could seize control of the industry, in the process killing decentralization, a factor that played an important role in its rise.
Jackson Palmer used three main claims to back up his argument. These claims are:
Censorship Resistance: This grants users the ability to transact with a currency using multiple sources. The decentralization of the blockchain technology ensures that no single organization can sensor the transactions between users and a digital ledger.
Palmer notes that institutions like Coinbase which are quickly becoming points of entrance into blockchain projects could result in the failure of the censorship resistance of the blockchain technology. Palmer stated:
“If Coinbase.com is hijacked or taken offline, a user relying on that provider essentially loses their access to the decentralization of the Bitcoin network.”
Trustless Transactions: Palmer emphasized that investors should have total control of their digital assets. Owners of cryptocurrencies actually own a certain amount of ledger in the blockchain project which corresponds with the amount of the project’s token present in his/her wallet.
However, companies like Coincheck now manage these ledgers for users. The more the users, the larger the pool of assets, Palmer used the Coincheck and Mt. Gox hacks, two of the biggest in the history of cryptocurrencies to emphasize this fact.
Verified History: Palmer’s last claim explains that Bitcoin enjoyed early success mainly because users could verify transactions independently, opposing the less transparent systems banks operated on.
However, institutional investors with their independent blockchains (with promises of faster, more efficient transactions) could become monotonous over cryptocurrencies, thus, taking away decentralization.
Basically, what Palmer is implying is that although the entry of Institutional Investors into the blockchain industry may result in the growth of the industry, building around them would grant them too much power, enough to take away the decentralization of cryptocurrencies and the blockchain industry.
Market Performance of Dogecoin (DOGE)
For a third consecutive day, while a great percentage of altcoins rally around the bull, Dogecoin faces decline. Over the last one hours, Dogecoin is down by 0.4%. DOGE has declined by 0.56% over the last 24 hours, and by 13% over the last 14 days. DOGE still remains the 24th most valuable digital asset with an estimated market capitalization of $425.2 million.