Requirements for Self-Sustainable Blockchain, Part 2

Author’s Comment: I wrote a seven-part article under the title, “#Requirements for Self-#Sustainable #Blockchain,” for the past two months or so in Korean and English. Here is the Part 2 that was missed. Once again, belated, better late than never. Grin.

1. Foreward

In Part 1 of my series on Requirements for Self-Sustainable Blockchain [1], I mentioned that many public blockchain projects are claiming to be decentralized and issuing ICOs; but in terms of actual operation, they are fairly centralized private blockchains — a serious problem undermining the basis of decentralization. Woohyun Jung (@Atomrigs), who first brought up this issue in a Facebook comment, expressed agreement in the following comment:

The comments read: (1) Yes, actually while this is more important, if ICON does not have a clear explanation, I think they will have to state that it is not a public blockchain. (2) It’s ridiculous that this issue still exists 8 months after the main launch — and the fact that it’s become this problem is absolute nonsense. I think the market is totally unrelated to this discussion, and it’s a fundamental problem in the current blockchain world.

Aware of the same issues as Jung, I quit my professorship and started EcoVerse™ to solve the existing problems within blockchain technology. We will do this by introducing solutions set up by our research team while taking into account to experts’ criticism and opinions.

2. Technology Development and Existing Blockchain Construction Problems

We should not forget to thank the pioneers such as Bitcoin and Ethereum for creating a new ecosystem. However, the first product of any new technology is never perfect. Cugnot’s first automobile, for example, had no brakes. There was no concept for brakes! Like Cugnot’s car, which crashed in its first test because there were no brakes, the early models of blockchain present many problems. This is why it’s essential to continually improve upon earlier models, ironing out issues, so that eventually they are useful to people in everyday life. Blockchain technology is a natural step in this process. However, there is conflict between blockchain/cryptocurrency’s core ideology and the current direction of its technological development: this problem sets it apart from before. In other words, while public blockchains such as Bitcoin and Ethereum have presented prototypes that are faithful to the idea of decentralization, long TPS and TFT limits day-to-day use of this technology. Because the causes and figures are widely known, I won’t go further into that. However, the reality is that Satoshi Nakamoto’s Bitcoin design undermines the basic ideology of public blockchain decentralization. To solve this and increase processing efficiency, new consensus algorithms and network architecture, such as DPoS, need to be developed.

Woohyun Jung, who continues to support the decentralization philosophy of Ethereum, mentioned the issue directly. In my opinion, this is issue is not confined only to ICON. There was also a lot of noise regarding the selection of 21 BPs and representative nodes for EOS, who raised the largest amount in ICO history. While there are differences in shape and degree, these things undermine the idea of decentralization that public blockchain claims to pursue. In the end, wealth and power are concentrated — and when this happens it is almost impossible to undo.

I consider this to be the most serious problem concerning the future of blockchain. Discontent come from problems caused by lack of decentralization, internal hacking and abuse, etc. There are already articles proving why most blockchains will eventually self-destruct due to these structural problems. (See: Nicolas T. Courtois, On the longest chain rule and programmed self destruction of crypto currencies, 2014) Moreover, the most serious concern is the concentration of wealth. As mentioned in the previous article, if the distribution of wealth continues to develop with a Gini coefficient of 0.99, as it is now, it will be fatal.

If, due to architectural inconsistencies in the system itself, these systems become self-destructive, one must seriously evaluate how issued cryptocurrencies can actually hold an asset value.

This article has been translated from its original Korean text, viewable on Steemit: https://steemit.com/ecoverseglobal/@nicklee002/2

References

[1] Youngwhan Nick Lee. Requirements for Self-Sustainable Blockchain, Part 1. https://bit.ly/2KDiV0D.