The co-founder of meme-based cryptocurrency Dogecoin, Jackson Palmer broke his silence on why he stopped engaging in this business. He bashed the entire crypto industry and its investors in a detailed Twitter thread. He said that it is an ultra-right-wing technology built to serve only the rich. Palmer further said that it exploits the worst aspects of capitalism and helps to increase the investor’s wealth by bypassing taxation, audit, and regulation.
Palmer has been quiet on this front since he mysteriously abandoned Dogecoin in 2014. He was even silent during the recent months when Dogecoin was enjoying a dramatic rise in its market value. The co-founder said that it was a bad sign for the cryptocurrency market. He also claimed that he did not leave with any money from Dogecoin and even sold all of his holdings by 2015.
Palmer became a vocal critique of the industry for misaligning the original vision of the cryptosystem. He referred the current market to a bubble that would burst in investors’ faces sooner or later. In series of tweets, he highlighted 3 major reasons why he would never do cryptocurrency business again.
Jackson Palmer Claims Cryptocurrency is not Decentralized
As the debates have been already going about the legitimacy of the bodies associated with cryptocurrency, Jackson Palmer agreed that the industry is indeed centralized to some extent. He drew comparisons between the cryptosystem and the current flawed fiat system, that crypto aimed to replace. He mentioned that there are the same rich organizations behind Crypto that are with the existing financial system.
Despite claims of “decentralization”, the cryptocurrency industry is controlled by a powerful cartel of wealthy figures who, with time, have evolved to incorporate many of the same institutions tied to the existing centralized financial system they supposedly set out to replace.— Jackson Palmer (@ummjackson) July 14, 2021
A research by IEEE Security & Privacy also found that the decisions and operation of major currencies like Bitcoin, do not define decentralization. Few entities control the services, decision making, mining, and conflict resolution. Moreover, researchers from Cornell University used Falcon Relay Network (FRN) to find out that most of the mining power resides with a maximum of 20 miners in both Bitcoin and Ethereum blockchains. The study found that Bitcoin especially has a lesser decentralized system due to data centers holding a large percentage of Bitcoin nodes. And, data centers are not decentralized as they are held by large corporations.
Roughly the top 4 Bitcoin miners and top 3 miners in Ethereum control almost 50% of the entire hash rate which means that only they will get the optimum speed of mining these currencies. Ethereum however has a bit better distribution network but Bitcoin under-utilizes its network. It also has a bigger block size which means that most of the time the reward for small miners of Bitcoin would be unpredictable.
Funneling Towards the Rich
Jackson Palmer has called the cryptocurrency community toxic and stagnant before saying goodbye. He argues that crypto institutions have all the distasteful characteristics of the traditional financial sector but with less security for an average user. Investors directly increase the wealth of top users because of the unfairly distributed computing power.
This refers to the fact that despite existing since 2009, the crypto industry still hasn’t evolved into a fully competitive market. It seems more like an oligopoly where few entities enjoy most of the outcome before distributing leftovers among the average investors.
No Protection for Average Person
Jackson Palmer also reminded the audience about how this technology promotes fraud, corruption, and inequality by using special software to avoid safety interventions. Miners are the most important asset of any cryptocurrency, and major coins on the block discriminate among their assets. This was the reason why he launched Dogecoin in 2013 to mock the establishment of Bitcoin. However, he is now speaking up clearly after 8 years.
He explained that the platforms are still not user-friendly as whenever a loss or scam occurs, the blame falls on users while billionaires who play a role in manipulating markets are hailed as geniuses.
Despite the verdict from a co-founder of a cryptocurrency, many people have already figured this out long ago. Human greed has eclipsed technological advancements so it was not hard to identify how they would be using a technology that is not implemented correctly.