A few days ago, the BSC network (Binance Smart Chain - created by Binance), completely stopped its operation, in response to an exploit that was taken advantage of by an unknown character, who managed to create 2,000,000 BNB (native token of the network), worth about US $560 million.
To prevent this individual from getting those tokens out of the ecosystem, and thus avoid losing the money, Binance decided to contact the 26 active validators that BSC has (who are in charge of keeping the network running) and convince them to stop their operations.
This is how, a network through which billions of dollars a day circulate, ceased all its operations in a matter of minutes. The Binance ecosystem (BNB Chain) today dominates 8.4% of the entire crypto industry, and hundreds of projects depend on it to function.
We have just witnessed the ease with which Binance, one of the world's largest exchanges, managed to stop almost 10% of the crypto world with a few calls.
A statement released by the company reads: “Decentralized chains are not designed to be stopped, but by contacting community validators one by one, we were able to prevent the incident from expanding further.”
So, does the end justify the means?
Someone could argue that the decision made by Binance was the right one to prevent further damage to the network. After all, those 2,000,000 BNB are equivalent to about 1.2% of the entire BNB in existence. Others might say that it was a disproportionate measure in the face of what happened.
But far more concerning is the fact that one company alone has the power to stop the entirety of a cryptographic network. Wasn't Bitcoin created in part to decentralize the control of financial power?
With the advent of new crypto domains and concepts, such as DeFi (decentralized finance) or DAO (Decentralized Autonomous Organizations), the term decentralized is now more widely used than ever, but where should we draw the line between centralized and decentralized?
In this case, the importance of decentralization lies in distributing the control of a network to several parties, increasing the participation of these parties in order to prevent a minority from being able to make decisions for a majority.
But the concept of decentralized is not black or white. Currently, one of the most decentralized spheres we know of is Bitcoin. This network has about 40 thousand nodes distributed in more than 5,000 cities around the world, and a total mining power that renders it the largest computational network on the planet (at least until we discover an advanced extraterrestrial civilization millions of light years away).
On the other hand, we have payment processing companies, such as Visa or MasterCard, who can unilaterally decide whether to stop or approve transactions.
But in between there are networks like BSC, which are not - apparently - controlled by the same company, but whose level of decentralization does not match what is often understood by this concept.
So where do we draw the line in defining what is or is not decentralized?