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Cryptocurrency’s transparency is a mirage: New research shows a small group of insiders influence its value (theconversation.com)

submitted 1 day ago by otters_raft@lemmy.ca to c/personalfinance@lemmy.ml

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TLDR: meme coin rug pulls, among other issues around centralization

Crypto-believers often blame greedy financiers as the cause of the Great Recession in 2008. But we argue that crypto is not immune to these same risks.

Public blockchains operate on a distributed peer-to-peer network. This network provides each user a complete record of transactions that is updated in real time. Users can send digital cash between themselves without relying on a centralized authority.

Since each user has a full record of transactions, the system promises full transparency. But our research demonstrates that public blockchains, and the cryptocurrencies that run on them, do not actually replace trust with transparency.

Speculation, manipulation and market crashes remain very real dangers, regardless of whether the financial system is centralized or decentralized.

Centralization of power in the hands of insiders is still a major issue in the cryptocurrency space. This is particularly an issue for emerging cryptocurrencies like memecoins. Memecoins are a type of cryptocurrency named after internet memes or similar jokes. They draw their value entirely from speculation.

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[–] superb@lemmy.blahaj.zone 3 points 1 day ago (1 children)

Are we sure that’s not just the size of the community? I’ve never heard of digibyte

[–] bjorney@lemmy.ca 2 points 22 hours ago

It's been around for a long time. It was very popular back in like 2017, but fell off because it's value proposition was "we are a shitty fork of the Litecoin codebase with a few constants changed (which was in itself a shitty fork of the Bitcoin codebase with a few constants changed) and no other meaningful changes"