1 min read

Who owns web3?

As I mentioned yesterday, over time all blockchains will be controlled by 10-20% of participants. That percentage is actually smaller for a lot of projects because of the way they fund the blockchain's creation.

A lot of blockchains launch using an ICO (initial coin offering) and take a percentage of their new currency for the team. There's nothing inherently wrong with this, but if too much is allocated to the team, it can harm the decentralization of the network. It gets more centralized as venture capitalists get involved. Then the token is listed on centralized exchanges (coinbase, binance, etc.) which end up holding a large percent on behalf of their customers.

This means that a lot of very popular blockchains (you know who you are) are basically just centralized. This replaces the "trustless" aspect of blockchains with "trust us."

On this particular front, Koinos is different. They ran a "fair launch" very similar to Bitcoin's launch. If you showed up and mined the token, you could earn a piece of the pie. The token distribution looks great, but it's still difficult to say how many actual people are represented by the 3000+ wallets. Even in the case of Koinos, it's possible (but unlikely) that 51% of the token is owned by a small number of people.

(related: if you know anyone who does investigation into this sort of thing, let me know. It would be interesting and possibly help with trust to get an estimate of how many holders there are.)

This still doesn't answer the underlying question, though... is it ok for a small percent of participants to effectively control the whole network? Let me know what you think. I'll share my take tomorrow.

More tomorrow,


P.S. I put up a new logo for The Koin Press. Check the website and let me know what you think.