The recent debacle involving Coinbase and the WikiLeaks shop has caused a fair bit of controversy. It is evident WikiLeaks will need to find a new way to solve its issues and deal with Bitcoin payments. Some people have even suggested looking at Kraken as an alternative, but the company acknowledges they are not in the best position to make good things happen.
Kraken Shares Some Honest Insights
It is hardly ever in the best interest of a cryptocurrency firm to acknowledge they are not the best option when dealing with Bitcoin payments. In the case of Kraken, the firm is mainly known for its exchange services, although they offer some other tools as well. On paper, it would make sense for WikiLeaks’ shop to accept Bitcoin payments through Kraken.
However, the exchange acknowledges they are not the smartest option in this regard. More specifically, the exchange has alerted users on Twitter that they are a “centralized choke point”. It is a very interesting way of phrasing things, although it also makes a lot of sense. Any centralized entity providing a Bitcoin-related service is a third party, which is not what this decentralized form of money is all about.
Thank you all for suggesting Kraken as an alternative for @wikileaks, however, Kraken is also a centralized choke point. Those who require uncensored financial autonomy should control their own private keys and rely only on the blockchain for processing.
— Kraken Exchange (@krakenfx) April 24, 2018
Instead, users should control their own private keys and use only the blockchain itself for processing payments. There has never been a need for custodial services, nor should there ever be when it comes to dealing with Bitcoin payments. For some reason, a lot of companies have made a lot of money by offering third-party services in the cryptocurrency industry.
With Kraken openly acknowledging they cannot provide users with the financial freedom they seek, an interesting precedent is created. However, everyone who does their own research knows all too well that exchanges and service providers are custodial services. Setting up one’s own method of dealing with Bitcoin payments can still require third-party service provider APIs, but with one’s own Bitcoin address to which one has the private key. That is how these payments should be completed from day one.
So far, the Bitcoin community seems quite pleased with Kraken’s honesty in this regard. Although calling itself a centralized choke point is not necessarily a flattering statement, it is the unbiased and simple truth. Whether or not this will lead to more people accepting Bitcoin payments directly instead of using third-party providers is a different matter altogether. It does mean users will need to convert Bitcoin to fiat currencies themselves, rather than having a third party do it on their behalf.
In the end, Kraken is scoring a lot of brownie points from all this. Their statement will only make the exchange more popular, at least until decentralized trading protocols become the new normal. In this day and age, it is due time people started taking Bitcoin wallet practices more seriously, as owning your private key equals owning your financial future.