Vitalik Buterin’s Exchange Deposits Reveal Crypto’s Centralization Problem

• Analysis shows that Ethereum co-founder Vitalik Buterin almost exclusively deposits to Coinbase, sending orders of magnitude less to other crypto exchanges.
• On-chain data based on his known addresses shows that his holdings are currently worth just short of $326 million, with $322 million worth in Ethereum.
• Buterin raised the issue of centralization in the crypto space, pointing out that decentralization is crucial.

Vitalik Buterin, the co-founder of Ethereum (ETH), is one of the most influential figures in the crypto-space. His opinion holds significant weight and his views are closely followed by many in the industry. Recently, analysis by Arkham Intelligence has revealed that Vitalik Buterin almost exclusively deposits to Coinbase when making transactions. Of the $1.08 billion made in exchange deposits from Buterin’s known addresses since late 2015, an overwhelming majority of $1.06 billion was directed to Coinbase.

This figure is not to be confused with Buterin’s current exchange balance, which is calculated by subtracting withdrawals from deposits. On-chain data based on his known addresses shows that his holdings are currently worth just short of $326 million, with $322 million worth in Ethereum.

The fact that Buterin is relying heavily on centralized exchanges may seem at odds with his earlier statement that these exchanges should “go burn in hell”. However, the convenience of fiat currency on and off ramping may have led to centralized exchanges becoming a necessary evil.

Buterin has been vocal about the issue of centralization in the crypto-space, and how many are forgetting that decentralization is crucial. He pointed out that in 2013 Bitcoin (BTC) mining pool GHash ended up operating 51% of the coin’s hashrate, and everybody “freaked out”. This same issue arose again when Bitmain’s mining pool had a significant proportion of the network’s hashrate, yet many in the industry were not as vocal about it.

Centralized exchanges have long been a necessary element of the crypto-space, providing a convenient means for users to buy and sell digital assets. However, their role must be balanced with the need for decentralization, and it is important that users remain aware of this. Vitalik Buterin’s use of Coinbase is a reminder of this need for balance, and also highlights the convenience these exchanges provide.

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