Nate is Head of Web3 Product at OKX, the second-largest crypto exchange by trading volume.
The battle over the future of money is underway, and it’s most often characterised as being between two belligerents – traditional finance and crypto/Web3. Although this contrast is catchy – it’s easy to picture Windsor knots and tailored suits versus hoodies and backwards caps – it’s ultimately misleading. The real conflagration is between centralization and decentralisation, and the battle lines are muddled.
That’s because there are those within the crypto/Web3 space that embrace decentralisation, and those who embrace it rhetorically, instead looking to build businesses and products that are decentralised only in name. Here’s why that’s a problem, and why OKX – the second-largest crypto exchange by volume and a leading Web3 technology firm – is investing in decentralised technology more than ever before.
In 2021, we launched the self-custody OKX wallet. It might be counterintuitive for a crypto exchange to invest so much in a product that allows users to self-custody their funds, as opposed to holding them on a centralized platform. We differ in significant ways from our competitors when it comes to this stance. But when viewed through the lens of OKX as a Web3 technology company, the case couldn’t be clearer.
Now I’m pleased that we are well on our way to achieving the second, more difficult goal of connecting users to the disparate world of Web3. Today, OKX announced that our Web3 Wallet is now compatible with 50 different blockchains. This means that users can interact seamlessly with 50 different crypto ecosystems, allowing them to move assets between chains, access staking platforms available across many ecosystems and benefit from a range of innovative Web3 products.
Decentralisation has always been a key tenet of crypto since the anonymous individual, or individuals, named Satoshi Nakamoto created bitcoin in 2009. Inside the genesis block, they hid a message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. This headline was a reference to the economic turmoil of the time and the need for a truly decentralised currency that couldn’t be unilaterally devalued by centralised monetary policy.
Decentralisation is a powerful message. Because it’s much easier said than done, as a term it should be wielded carefully. But over a decade after the bitcoin genesis block, many in the crypto space have lost their bearings. Some use ‘decentralisation’ to describe their product, but they don’t actually make any effort to decentralise at all. This is important because centralisation – in anything, not just crypto – carries inherent risk. Examples include FTX going bust in 2021, or the founder of crypto exchange Quadriga who passed away and carried the private keys to his customers’ crypto to the grave.
As Head of Web3 Product at OKX, I work on the front lines of building decentralised products for the next-generation financial system. My team specialises in building products that are radically transparent and open source. And in Web3, there is no product more crucial than the wallet.
As I mentioned in my first piece for CityAM, the potential for crypto lies in empowering individuals to take control of their finances and assets. But in order to do this, they need crypto wallets that allow them to do two crucial things: safeguard their funds, and connect them to the wide and disparate world of Web3 which exists on many different blockchains. The OKX Wallet does both.
Although it is tempting to view the cryptocurrency debate through a dichotomous lens of suit-wearing bankers versus hoodie-sporting coders, the truth is that there is a deeper struggle between those on both sides who prefer a comfortable yet inherently flawed centralised system over the decentralised alternative.
Our response at OKX is to invest in true decentralised products like our Web3 wallet so that everyone has a choice in the matter. Only then can it be a fair fight.
THIS ARTICLE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY. IT REPRESENTS THE VIEWS OF THE AUTHORS AND IT DOES NOT REPRESENT THE VIEWS OF OKX. IT IS NOT INTENDED TO PROVIDE ANY INVESTMENT, TAX, OR LEGAL ADVICE, NOR SHOULD IT BE CONSIDERED AN OFFER TO PURCHASE, SELL OR HOLD DIGITAL ASSETS. OKX IS NOT REGULATED BY THE FCA, THUS, PROTECTIONS SUCH AS THE FINANCIAL OMBUDSMAN SERVICE OR FINANCIAL SERVICES COMPENSATION SCHEME WILL NOT BE AVAILABLE. YOU SHOULD CONSIDER WHETHER YOU UNDERSTAND HOW CRYPTO WORKS AS DIGITAL ASSET HOLDINGS, INCLUDING STABLECOINS, INVOLVE A HIGH DEGREE OF RISK, CAN INCREASE OR DECREASE AND PROFITS MAY BE SUBJECT TO CAPITAL GAINS TAX. PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS