(This is an opinion piece and a bit of a rant. I do not have experience with designing blockchains or extensive knowledge of CryptoCurrency, so take what I say with a grain of salt. If I write something wrong, feel free to correct me in the comments.)
How decentralized does something have to be, to be truly decentralized?
I think that is an interesting (maybe philosophical) question. I think we really have to classify decentralization on a scale of sorts.
I see different levels of decentralization. Many if not most CryptoCurrency are decentralized in the sense, that Cryptos generally use a massive network of computers from different - on the surface level - unaffiliated partakers.
Bitcoin was the beginning of it all. However, Bitcoin is not what it used to be. Through forks, the code has changed. The good thing is, that an overwhelming amount of partakers must agree to change the code. It is not a democracy, where 51 % decides the fate for Bitcoin. But what happens, when I control a vast network of computers throughout the world, and I sign people up to mining pools, whom I ultimately, have some control over. I now have a huge voting ability for what is to come. Mining Bitcoin is now very expensive. It requires an incredible amount of computer power and electricity to take part in a meaningful way. As I see it, fewer and fewer people are able to partake - at least as with how things currently are.
Bitcoin Core developers - people who are considered important developers by the Bitcoin community/communities - have power by their title “core developers”. The very name itself makes them sound more important than regular users of Bitcoin. In one sense they are are more important, since they dedicate their time, knowledge and skills to upgrading the code. In another, they are not, since more users are one aspect that makes the project more decentralized
To me, it is a good thing, that Bitcoin was created by an unknown entity “Satoshi Nakamoto”. Since Bitcoin has a pseudonymous creator(s), it is impossible to attack this creator. You can't blame him/her/them if the project does not work as intended, and you can´t cause them harm either, meaning there is no one to blackmail. Of course, having one unknown creator has many downsides too. The whole point of decentralization is to not have one spot to attack. It means you have to convince every participant, that your idea is good, not just one developer.
Despite all this, Bitcoin is probably still one of the most decentralized Crypto systems anyway. Not because of the code, but because so many different (or at least seemingly different) entities have to come together in agreement. A new Crypto can come along with smarter consensus code, that consumes way less electricity to keep running, but it has to reach the same amount of users as Bitcoin - or at least close - to be comparable. Because if you run great code, but you and your two friends are the only one participating, or the ones with a vast majority of voting power, nothing is really decentralized anyway. It will just be the three of you controlling the system that everyone else uses.
This is a problem that every new CryptoCurrency, that aims to be truly decentralized, should aim to overcome. In order to have a decentralized system, you have to give up control. With most CryptoCurrencies being pseudonymous and some being anonymous, it is not easy to keep an eye on, if people who claim to have given up power to further decentralization, have actually done so. Maybe their wealth is just spread thinly through different wallets. I don’t even know if this is even doable. Is it viable to believe, that those who control large sums of the CryptoCurrency, they created or adopted very early, will give it up, to have a system they can’t ultimately control? That would be giving up their “baby”, their wealth and their control all at the same time.
Decentralization is also missing in the seemingly small places. Look at Twitter, a lot of Cryptos have an official profile with updates from core developers. However, given that one group (or one person) can control that Twitter profile, they also control the message. They have a say in how things move forward and how things are perceived. That is absolutely not decentralization either.
Now I am not even saying that everyone has to create something decentralized. But if you claim something is truly decentralized you have to act accordingly. “Decentralized” is becoming a buzzword that people use with anything. Sometimes I think it is what people say, when they pretend to not be in control.
I for one run a community here on Steemit and through Discord: Looking For Niche. It is a community where CryptoCurrency inadvertently plays an important part, but it is not decentralized, and I will never claim that it is. If it was, I wouldn’t be running it. There would be no admins. It wouldn’t be on Discord (because that is owned by private company, who decides how it develops). The community token: LFNCOIN is not decentralized either. Sure, it is running on BitShares code, but I decide who gets it through contests et.al, and I sit on the vast majority of coins. Should I choose to, I have final say if Looking For Niche and LFNCOIN continues to be exist and be used or not.
Truth is, I don’t know how we should go about creating this scale, and I certainly don’t know how we should go about having a truly decentralized system of currency. There always seem to be someone who wants control - who can take it, if no one else does.
My point is, be vary when you read claims of “decentralized” - and be vary too when people claim their new CryptoCurrency or Crypto project is the best thing ever. It might be a good plan, and it might be good code, but it cannot really be decentralized without the project being spread thinly between an enormous userbase.
I hope my rant made sense. Do you agree or disagree? Feel free to tell me in the comments below.
Good post, i'm trying to learn what truly decentralized means. Hey, let me know if there's a website that categorizes different crytpos by type, based on their structure or features, that would be fascinating. ty
I don't know of such site unfortunately, but thanks for reading!
I'm pretty new to the cryptoverse, so my understanding of it is necessarily limited, but its in the nature of certain things that they are more of a concept or ideal than something that can be attained. Infinity is an example. You can never reach infinity. Perhaps decentralization is another. And while a degree of control is possible, as in your example about Twitter accounts, in practice it would be difficult to achieve without a lot of effort--bearing in mind the law of diminishing returns.
Infinity is possible through mathematics, but I get your point. I don't know if ultimate decentralization is possible, but there is definitely big differences in how "decentralized" different Cryptos are.
Still if we consider everyone started using BTC and for sake argument we have 7,569,349.38BTC in circulations as per https://blockchain.info/ with market cap 64,867,502,636.00USD consider $4042.92 for each BTC...now if everyone is using just BTC you have to represent world capitalisation in BTC alone we have 1.2quadrillion in derivatives and around 90trillion M1 adding stock markets and everything as per this blog http://www.marketwatch.com/story/this-is-how-much-money-exists-in-the-entire-world-in-one-chart-2015-12-18 consider we have market cap of 1.2 quadrillion + 630 trillion that makes up 1,200,000,000,000,000+630,000,000,000,000 which brings to 1,830,000,000,000,000USD you have to represent all this wealth in BTC so each BTC should be 24176450.4204USD this is 597994.776553% increase in its current value all this considering ideal and healthy economic condition.
What happens to banking system banks cant regulate volume so the concept of inflation be changed and reversed to carrier of value(money) rather sticking with traditional commodities
I would love to see these in some ideal currency which could be accountable(i dont mean tracable to evade privacy though) so there wont be any wealth destruction and somewhat tangible and technological so that it wont be limited to technology limitations and speed to accomodate
I think I am too tired to comprehend all that, haha.
But I will say, that having BTC as the only CryptoCurrency (or even only currency) is not what I would hope to see. Competition is (mostly) healthy, and being able to create something that jives with you and your community I think is important.
Bitcoin is popular, because it is popular - that's a roundabout way of saying, that Bitcoin is the name everyone knows, and it is the base price for a lot of exchanges, making it the de facto CryptoCurrency. It probably won't always be, and we are only in a very infant stage of blockchain tech. It might make way for something totally new in the future, that we can't yet conceive of.
This is why bitcoin is worth so much compared to the other alt coins.
The strength of the network, the pure unfathomable power of all miners together. No big agent can grab 51% of the network, not even a state.
There will be always someone who wants control, and people more in power and authority than other people. That's just how humans work, dominance hierarchies always form.
It does seem to be how humans always end up, and you are right about it's userbase/power of miners. However, I think it's important to consider ways, in which we can improve the "decentralization".
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I agree with you..Nice post bro
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