If any of you is a “Trekkie” like me, that is, a Star Trek fan, you will have in mind the slogan of the series “To boldly go where no man has gone before”.
Image by p2722754But if any of you believe that the aerospace industry is chasing the “to boldly go…” ideal, I have bad news. The aerospace industry, which absorbs billions of dollars a year, is presented by the corporations involved as a research project to discover and project new horizons for humanity, as Rodenberry dreamed of. But can anyone believe that hoax? In reality, the aerospace industry is a laboratory for the development of new weapons. It's the perfect camouflage for the arms corporation, fooling the herd with a supposed job to improve the species. Advances in tactical and strategic weapons in recent years were born in space research centers. A disappointment for Spock and for us, his fans.
In the same way, the CEXs, which were born to join a new technology that could mean a quantum leap for humanity, have become mere reproducers of the pernicious traditional banking industry that serves the capitalist system, be it in its socialist variant, as in its neoliberal variant. Instead of using state-issued IOUs, they use encrypted zeros and ones, but the truth is that the same traditional finance crap run by an international financial elite to allocate resources among corporations has now become a strange monstrosity loosely named CEX and Defi, used by the whales to do the same shit they do through the still very active commercial and central banks.
In an article that I published in August 2022, I showed the competitive map of CEXs and the dangerous monopolistic pattern that is posed by a gigantic competitor like BINANCE in practically total solitude. Those that follow Binance are far behind, measuring performance in daily trading volume. The competitive situation has worsened since then with the catastrophic fall of FTX and its domino effect.
The truth is that, on a daily basis, exchanges offer you alternatives for your money, with ultra-sophisticated products that always end in a loss for the common man and woman. CEXs are at the moment battlegrounds for whales, presented to the general public as advanced personal finance tools. The CEXs and the whales are highly stimulated to attract the idle capital flow that has not yet approached the crypto sphere, not to make people happy, but to steal it from them, taking advantage of the long experience of professional traders who are the ones who are going to win, in a completely legal way, the money that others deposit.
It is very simple, a common person can deposit, for example, $1,000, which can represent a large sum of money for that person. This is not attractive to a whale, but if 10,000 people deposit $1,000, the CEX receives $10,000,000. Now things change. The CEX, as a bank would do, will stimulate each person to make a margin trade, copy trade or try a trading bot, or try an "earning" option, with attractive rates for people. But in reality, what is going to happen with that mass of money is that the whales are going to operate with the dirty tricks of traditional finance and they are going to earn a lot of money, without distributing it, just as it happens in traditional banking. In the best of cases, the person will be able to recover some money, but you know, in the casino the bank always wins. In the worst case, the CEX will say that, in order to "take care of our customers" they suspend withdrawals and subrogate to chapter 11. Ordinary people will never see their $1,000 again, and the CEX and its stakeholders, protected by law, will continue to operate in the next undertaking.
That's what happened at FTX. The typical businesses of the traditional banking and financial industry were exposed on the exchange, although now with cryptocurrencies. In case you didn't see SBF in their NY Times report, take the time to watch it. It's worth it. He looks like a boy scout who got into mischief at camp.
Now, this chart that CoinGecko published today (3/12/2022) shows an interwoven network of corporations and financial institutions that are woven into the FTX network. Could this have been done by a boy scout? In the previously cited video, SBF talks about strong political contributions with both dominant parties in the US, and also about large international donations for pandemic prevention causes.
I even read somewhere that SBF is probably the most contact person on the planet in the world of finance, and that he will soon come back with a lot of money to solve the bankruptcy situation. What's more, several say that they are going to follow him in his next ventures, which I sincerely hope will not be in the world of cryptocurrencies.
Now, the danger of monopoly that the CEX sector faces with Binance becomes a problem that can be serious in the medium term. Fortunately, ordinary people are understanding the concept of decentralization and what this means as a fundamental difference from the modern banking and finance industry, born in the late Middle Ages. People are beginning to understand that the transmission of value can be done without intermediaries, although they still have not been able to disincorporate the system imposed on their heads for so long. The CEXs take advantage of this and do their business with whales (also called institutions or banks) to continue doing the same thing they have been doing, but now with cryptocurrencies. This in the hands of a monopoly like Binance is more dangerous than a monkey with a razor.
Image by Jules RufenachtImagine all of this huge traditional financial power that is still widely held, in the hands of a single dominant company that masks its operations under the veil of cryptocurrencies.
More than ever, then, it is necessary to understand once and for all that “not your keys, not your money”. When you deposit money into a CEX, your money is no longer your money. It's from CEX. Did you understand? They will tempt you with countless ways to earn a lot of money so that you leave your money in the CEX. But don't do it!
During my experience of more than 11 years already in the crypto sphere, I must say that I have used and continue to use CEX for my exchange operations, and I do it out of convenience and habit, rather than conviction. At some point I also tried the “earn” offers of several of them, and I was tempted by the KUCOIN “gem” offers, about which I wrote some posts. But I learned that this is not the way. Gems must be sought away from their sponsor, through keen investigative scrutiny and scenario analysis.
If you are going to use an exchange because you need to do some exchange operation, always try to use a DEX. But, if you are attracted to a CEX that you have always traded with and never had "any problems" (and you don't mind that they do big business with your money without giving you a penny), then make your trade and run away from the CEX immediately, as if you had seen the devil himself. As long as your money is there, it will never be yours and you could find yourself one morning that, to take care of yourself, they prohibit you from withdrawing the money.
Today the CEXs are getting tired of announcing that soon they are going to release a complete report of “Proof of Reserves” supported by Merkle's Trees, which was suddenly reborn, after being presented in 2009 by Satoshi Nakamoto in his legendary paper. But, you know, banks have lived their whole lives manipulating information, why would they change now that they are in retreat?
Of course, the FTX event does not change the fundamentals of the main cryptocurrencies that remain intact, as well as the concept of decentralization and the transmission of value without permission and without trust. Those of us who trust in this technology have not suffered any problems, because there is nothing more to understand about how each of the tools offered by the crypto sphere works.
The CEXs are banks and precisely what we want is a world without banks. The FTX event should be the last one that catches you off guard.
Speaking of brothels, CEX is a lot like SEX.
Image by Erik TangheConclusion
A virus infiltrated the crypto ecosystem, camouflaged itself as a benefactor, and began to play the same perverse game as traditional finance. The virus was mainly housed in the CEXs, but not only there, there are many Defi platforms that operate in the same way as a traditional bank, capturing unsuspecting people who deposit their money hoping to get rich in two weeks and are fleeced with legal techniques, without having to resort to scams or rug pulls. Just doing what the banks do every day and the vast majority of the world's population continues to put up with.
If you want to continue operating with CEXs, know that this is the greatest risk that exists in the crypto sphere. Use a little good sense and if you went in, get out as soon as possible, like you would from a brothel.
Thank you for reading! Decentralize yourselves as much as you can, and much more! Work for yourselves, not for others. When you work for someone else, they pay you what YOUR POSITION is worth, when you work for yourself, they pay you what YOU are worth. No one achieves financial independence by working as an employee. Live long and prosper!
Never forget:
As usual, none of the things written in this post are financial advice and are not intended to replace personal research. My sole intention in writing this post is informative. Several of the things discussed here could be wrong, so in no way can this post be construed as financial advice, and in no way should it replace your own research.
If you have any questions or comments, please feel free to leave them down below
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