Qortal vs. The Four Horsemen of Crypto Exploitation

Blockchain technology was supposed to eliminate middlemen, and allow the exchange of data between two individuals directly!

Yet today, four types of intermediaries have wormed their way into the blockchain ecosystem, extracting outsized value under the guise of “security,” “scalability,” or “legitimacy.” They have disparaged the real meaning of peer-to-peer communication, and have blurred the lines between Web2 and Web3 entirely!

These intermediaries are: corporate mining operations, centralized exchanges, government regulators, and hardware wallet companies. Each promised to bolster crypto’s success; instead, they’ve often undermined decentralization and profited at users’ expense. This post takes a sharply opinionated look at how each of these four gatekeepers has failed the community, and how the Qortal blockchain renders them obsolete by design. We’ll see real examples of their exploits and argue why Qortal’s architecture is a philosophical break that restores power to the people.

Mining Companies: The Centralization of “Decentralization”

Bitcoin’s proof-of-work mining was meant to be decentralized, whereby anyone with a computer could support the network. This was obviously an unreachable ideal. Fast forward to 2025, and two giant mining pools (Foundry USA and AntPool) now control 57% of Bitcoin’s hashrate.¹ In a system built to resist central authority, the emergence of mining cartels is a bitter irony. These companies pour millions into ASIC hardware and electricity, concentrating power in a few hands. The result? A handful of players can potentially censor transactions or even attempt 51% attacks, threatening the network’s security. We’ve also seen miners openly censor transactions under regulatory pressure. For example, F2Pool, a large mining pool, briefly blocked OFAC (Office of Foreign Assets Control) sanctioned addresses in early 2025.² So much for the egalitarian dream of crypto mining. The truth is that mining has become an arms race where only those with massive capital win, undermining Satoshi’s vision of a one-CPU-one-vote system!

Qortal blows up this paradigm! Instead of mining, Qortal uses a novel minting system where every node operator can earn rewards for supporting the network. There are no expensive GPUs nor ASICs required to do so!³ Furthermore, it’s needless to say that there are no mining pools or token-staking schemes in Qortal. Every individual with a modest computer (even a Raspberry Pi) can participate on equal footing. The network’s security doesn’t depend on corporations with warehouses of machines; it rests on a community of users distributed worldwide. Qortal’s consensus actually rewards every active minter for each block, not just a single winner. By removing the incentive for brute-force hash power, Qortal makes the mining company model irrelevant. There are no more “miner kings” extracting rent from the blockchain. It’s just individuals collectively securing the network in a fair, energy-efficient way. It’s a structural change that restores decentralization and economic fairness at the base layer.

Centralized Exchanges: Single Points of Failure and Exploitation

Centralized crypto exchanges present themselves as convenient on-ramps and liquidity providers. In reality, they have been the Achilles’ heel of this industry time and again. We only need to talk about the Mt. Gox incident, for example, where approximately 850,000 BTC went missing.⁴ Or, if not, the FTX scandal , which turned out to be a $8+ billion fraud, to recall how badly this can end.

FTX, once the third-largest exchange, collapsed in 2022 amid revelations that its executives embezzled customer funds.⁵ Users who trusted the FTX team as intermediaries paid a terrible price . There were approximately $8 billion in deposits that vanished, and Sam Bankman-Fried is now a cautionary tale in prison. And it’s not just FTX: countless exchanges have been hacked or mismanaged, from Bitfinex to Quadriga, shedding billions of dollars of users’ assets over the years. Even when not outright failing, centralized exchanges re-centralize crypto. They hold your private keys, they can freeze withdrawals, enforce intrusive KYC, and act as gatekeepers of which tokens get listed (often for hefty fees). In effect, they recreate the very custodial risks and power imbalances that Bitcoin was meant to avoid. The infamous “Not your keys, not your coins” stems from the dangers of storing your coins on wallets found on centralized exchanges.⁶

The FTX scandal sent shockwaves through the crypto space!⁷

Qortal’s answer to this problem is quite simple: get rid of exchanges entirely. Built into Qortal is a decentralized cross-chain Trade Portal called Q-Trade, that lets users trade crypto assets peer-to-peer without any middleman. Want to swap QORT for LTC or DOGE or ARRR or BTC or DGB or RVN? You do it directly from your wallet to someone else’s wallet, on-chain, via atomic swaps. There are no deposits, no custodian, and no trust in a third party.⁸ The Trade Portal uses an Atomic Cross-Chain Trade smart contract (ACCT) to automate trades, so it’s as easy as using a normal exchange interface but without handing your coins to an operator. The result: not your keys, not your coins is no longer an issue.

Users never relinquish control of their coins during a trade, and thus exchange hacks or freezes become impossible. When an exchange has no order books and holds no user funds, there’s nothing to hack and nothing to steal. Qortal effectively nullifies the need for centralized exchanges, ending the exploitative fee-taking and the catastrophic counterparty risks. After all the billions lost and trust broken by exchange CEOs, a trustless trade network is a breath of fresh air.

Government Regulators: Gatekeepers in the Name of Legitimacy

One can argue that Bitcoin (crypto) and blockchain technology was born as a form of revolt to government control, but governments have since tried to quell this revolution. Under the guise of “investor protection” and “legitimacy,” regulators often introduce rules that paradoxically reinforce centralization and hinder self-sovereignty.

A glaring example came in 2022, when a proposed U.S. law (the Digital Commodities Consumer Protection Act, strongly backed by FTX’s founder) would have effectively outlawed DeFi by imposing compliance requirements that only big centralized players could meet.⁹ In other words, the very response to FTX’s failure was a bill that strengthened exchanges like FTX and undermined decentralized alternatives. This is governmental regulation at its finest! Big insiders cozy up to lawmakers to craft rules that punish their open-source competition. Even outside such bills, we see regulators forcing crypto into old molds: licensing that only wealthy companies can afford (e.g. New York’s BitLicense), crackdowns on privacy tools (e.g. the Tornado Cash sanctions), and pressure on miners or, as we’ve seen earlier in the blog, validators to censor transactions for compliance. The pattern is clear: when regulators step in heavy-handedly, the little guys get pushed out and the essence of decentralization gets diluted in favor of surveillance and control by a few approved entities.

Qortal takes a radically different stance: build a system that governments can’t easily control or co-opt. Its network is leaderless, borderless, and immune to on-demand censorship. There is no corporation to subpoena or license. The code is open-source and the nodes are run by volunteers worldwide. By design, no one (not even the Qortal developers) can unilaterally remove an account or block a transaction.8 Attempts to censor or sanction at the protocol level are essentially impossible, because any such change would invalidate the blockchain’s integrity. In Qortal’s world, “code is law” truly prevails over political whims.

Qortal resists Web2-style infiltration by government or corporate interests, keeping the power of the platform firmly in the hands of its users. After years of seeing regulators alternately ignore and hamstring the crypto space, Qortal’s approach is a return to cypherpunk first principles: privacy, freedom of speech, and self-regulation on a platform that values sovereignty over compliance.

Hardware Wallet Companies: Selling Security as a Service

If you hold your own crypto in a self-custodial cold wallet, chances are you’ve heard of hardware wallets from companies like Ledger or Trezor. These devices are sold as the ultimate way to secure your crypto, keep them isolated, tamper-resistant, and safe from online attacks. And yes, hardware wallets do mitigate many risks, but let’s not ignore the irony: crypto enthusiasts fled the banks only to be told to trust new middlemen with safeguarding their keys.

Cold wallet companies have built profitable businesses charging a premium for security, and recent events show even they are not infallible. In 2020, Ledger (a French hardware wallet maker) suffered a data breach leaking personal info of hundreds of thousands of customers, leading to phishing attacks.¹⁰ Then in 2023, Ledger outraged its user base by announcing “Ledger Recover,” an optional service to back up seeds by splitting them with third-party custodians. This move blatantly undermined Ledger’s previous promise that private keys never leave the device. The backlash was swift and severe. Users realized that a firmware update could export their keys if enabled, effectively a built-in backdoor capability. For a company whose motto was security, it was a PR disaster showing that ultimately you still must trust the vendor not to betray your expectations.

Even storing your coins in a cold wallet device now comes with risks. The companies building them have begun introducing centralized components, like cloud backups or proprietary chips, which can be compromised if stored on centralized cloud services¹¹

Even without such missteps, reliance on closed-source hardware and proprietary elements means you place a lot of faith in these companies’ competence and honesty to manage your wallet. They’ve essentially monetized self-custody, trading convenience for self-sovereignty and security!

Qortal makes the role of hardware wallet vendors much less relevant. Every Qortal user is by default a self-custodian, because running a Qortal node means you hold your own keys on your own hardware, secured by strong encryption and the network’s design. There is no need to purchase a separate $150 gadget to achieve “real” security.

Qortal was built to be secure from the ground up on standard devices. You retain sovereignty without having to rely on a third-party manufacturer’s firmware updates or opaque chips. Importantly, your keys never leave your Qortal node or local wallet. Of course, good operational security is still up to the user (Qortal isn’t magic), but it frees users from the need to entrust a specialized company as a permanent wallet guardian. In the Qortal model, security isn’t a product you buy; it’s an inherent feature of the decentralized platform!

A Future Without Parasites – By Design

The crypto revolution has been held back by these four parasitic intermediaries that claim to “help” the Web3 space, but end up helping themselves to power and profit. Mining conglomerates turned blockchain security into a centralized commodity. Exchanges asked users to forsake trustlessness for convenience, and repeatedly betrayed that trust. Regulatory bodies preached consumer protection while often protecting the incumbents and strangling decentralization. And hardware wallet firms sold users peace of mind, then reminded them that closed systems ultimately require blind trust. Enough is enough!

Qortal demonstrates that we can ditch these middlemen and still have a thriving, secure, user-friendly crypto ecosystem. In fact, we can have a more decentralized, censorship-proof, and fairer ecosystem without them. Qortal’s architecture isn’t about tweaking the old model. Instead, it’s a complete shift from those exploitative paradigms. It achieves security through cooperation, not competition; it achieves trading through code, not custodians; it achieves governance through community, not bureaucracy. The result is a platform aligned with the original Web3 ethos: by the people, for the people, with no middlemen in between.

The four horsemen of crypto exploitation have had a good run, but projects like Qortal are proving that their services were never truly needed – and that the future doesn’t belong to those who would centralize and control, but to those who empower and decentralize. The message is clear: evolve or die – and for these crypto middlemen, Qortal is making that choice for them.

Qortal removes the need for mining pools, centralized exchanges, government regulators, and hardware wallet companies

1. Coinpaprika. (2024, February 5). Two mining pools now control 57% of Bitcoin’s hashrate. Coinpaprika News. https://coinpaprika.com/news/two-mining-pools-now-control-57-of-bitcoin-s-hashrate/

2. Atlas21. (2025, March 3). F2Pool accused of transaction censorship and vulnerability in Bitcoin Core. Atlas21. https://atlas21.com/f2pool-accused-of-transaction-censorship-and-vulnerability-in-bitcoin-core/

3. Qortal Project. (n.d.). Qortal Wiki. Qortal. https://wiki.qortal.org

4. Chang, A. (2014, February 28). Mt. Gox files for bankruptcy, says it lost 850,000 bitcoins. Los Angeles Times. https://www.latimes.com/business/technology/la-fi-tn-mt-gox-bankruptcy-bitcoins-20140228-story.html

5. Kvilhaug, S. (2023, November 15). What went wrong with FTX? Investopedia. https://www.investopedia.com/what-went-wrong-with-ftx-6828447

6. Ledger. (n.d.). Not your keys, not your coins: Why it matters. Ledger Academy. https://www.ledger.com/academy/not-your-keys-not-your-coins-why-it-matters

7. Fox Story India. (2022, December). The FTX collapse scandal [Image]. Fox Story India. https://www.magzter.com/stories/business/Fox-Story-India/THE-FTX-COLLAPSE-SCANDAL

8. Qortal Project. (n.d.). What is the Qortal project? Qortal Wiki. https://wiki.qortal.org/doku.php?id=what_is_the_qortal_project

9. Britzky, A. (2022, November 15). The ‘SBF bill’: What’s in the crypto legislation backed by FTX founder? CoinDesk. https://www.coindesk.com/policy/2022/11/15/the-sbf-bill-whats-in-the-crypto-legislation-backed-by-ftx-founder

10. Browne, R. (2023, May 16). Ledger bats back criticism of new wallet recovery service. CoinDesk. https://www.coindesk.com/tech/2023/05/16/ledger-bats-back-criticism-of-new-wallet-recovery-service

11. Leswing, K. (2019, January 6). Ledger Nano X hardware wallet [Image]. TechCrunch. https://techcrunch.com/2019/01/06/ledger-announces-next-generation-cryptocurrency-hardware-wallet/