Centralization of assets
While the introduction of blockchain was supposed to herald the decentralization of money and power, today we see that it has had the opposite effect. According to the Venturebeat site, 80% of the $41 billion capitalization of NFTs on the Ethereum blockchain is held by the 9% of whale accounts. To put that into perspective, Statista reports that the richest 10% of Americans control almost 70% of total US wealth.
Analysts fear that this centralization will only get worse over time. Tech behemoths like MicroStrategy and You’re here accumulate crypto assets worth billions of dollars at a time.
Centralization of resources
As Bitcoin is a proof-of-work cryptocurrency, existing miners will continue to invest their earnings, purchase more equipment to increase their capacity.
Furthermore, the existing structure of Web3 depends on the presence of an intermediary. Most decentralized applications (DApps) depend on centralized infrastructure and services.
Node as a service infrastructure is offered by companies like Infura and GetBlock. Platforms like Alchemy and Moralis also help accelerate DAapp development.
Developers don’t want or can’t afford to run their own servers. It requires a lot of resources and takes a lot of time. Plus, they don’t want to have to write every line of code from scratch every time they create a new app.
There will always be a need for centralized goods and services, and this demand is not going away anytime soon. Which brings us back to Web2!
Be vigilant and consult your financial adviser before making any investment decision. Mirror-Mag cannot be held responsible in the event of bad investments. Before using any third-party service, you should do your own research.