Bitcoin will never solve FTX-like problems, Cardano can do it

English Education
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Up to 70% of all bitcoins were traded on the Mt. Gox exchange before its crash in 2014. The exchange stopped trading activity and was subsequently declared bankrupt. The FTX exchange collapsed in 2022, and like 8 years ago, the market value of bitcoin is falling. History is repeating itself, just on a larger scale as the blockchain industry is much larger today. The cause of the problem is the same in both cases. It is the centralisation of power in the hands of an unreliable and untrustworthy middleman. The blockchain industry has failed because, even after 8 years, it has not been able to deal with the problem it has been trying to solve from the beginning. Our only hope is that this will not be the case forever. Cardano is being built to be able to solve exactly these problems. It may take another 8 years, but at some point, we have to get rid of the unreliable middlemen.

TLDR

  • Exchanges hold huge amounts of capital and CEOs will always be tempted to use it for their own business without the consent of depositors.
  • Bitcoin is dependent on centralized exchanges and will be directly affected by FTX bankruptcy as the market value of BTC affects the profitability of mining.
  • The market value of cryptocurrencies is created by supply and demand. Everyone is better off if they meet on decentralized exchanges.
  • A decentralized application is just a definition of the steps to be executed based on the expected events. Everyone can look at the steps and decide whether to use the service offered.
  • The Plutus platform will make it possible to write applications that can be proven to be secure.
  • The more crashes we see in the CeFi space, the more it will become clear to everyone that DeFi and self-custody are the only way to go.

This article was prepared by Cardanians with support from Cexplorer.

Read the article: Bitcoin will never solve FTX-like problems, Cardano can do it | Cardano Explorer

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That claim might be a bit too bold:
https://web3isgoinggreat.com/?tech=defi

On Cardano, we had no huge failures, but that might also have been at least partly luck – the luck of the smaller target, like Linux’s less malware is also only partly better architecture, but also less users.

Moreover, we have to deeply analyse if the promises of decentralisation are really kept. A lot of the dApps today are still deeply centralised. You can without problem write into a contract that only some privileged market makers can seal deals and – bam – the whole thing is very much centralised despite using the nice, shiny, supposedly decentralised technologies.

And few people have the possibilities or will to really analyse the contracts and ask if that is really what they want to subscribe to. The marketing that there is some decentralised contract voodoo in there is totally enough for them.

Lastly, for the foreseeable future, DEXes/DeFi cannot be a complete replacement for CEXes/CeFi. You still need on- and off-ramps, as long as the real world uses fiat.