Decentralised cryptocurrency is dead

Roman Semko
Nov 12, 2017 · 4 min read
Image for post
Image for post
(Russian: centralised pumps)

Financial rewards will always create inequality

As I demonstrated in my previous article “IOTA: why free transactions matter most” the problem are the rewards. By paying someone to run the network, you are giving away your power. By giving away your power, the system becomes unbalanced: there are few powerful players and the large, powerless base. The base cannot exist without the powerful miners, who get more and more powerful as the time progresses.

Image for post
Image for post

Inequality will always lead to centralisation

A seemingly decentralised coin becomes just another flavour of the current financial order where the wealthy few can manipulate the system as they see fit. Again, the coin or its tech does not matter a dime. PoW, PoS or whatever. As long as it rewards the miners, it puts them above and beyond the system. The only motive for miners to keep everything running is money. They do not care about the coin per se. If tomorrow there wasn’t Bitcoin, they would mine Ethereum, LiteCoin or whatever there is.

Centralisation makes cryptocurrency obsolete

If you have a very few individuals that control the destiny of a coin, what makes it different from the current monetary system? You replace the central banks with central miners. So why bother?

The dream is dead

The power that was handed over to the miners is the same that destroyed the idea of a decentralised cryptocurrency. The dream is dead. Any coin that manages to become a leader in the cryptospace will face the same problem, unless it gets rid of the miners.

There is hope

No one should be above the system or have another motivation apart of being part of it. There shouldn’t be any difference between miners and users. Every member of the whole should be equal. It can be done if you go to the root of the issue and remove the financial rewards of running the network. No rewards = no inequality. No inequality = no centralisation.


DLT research and development

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch

Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore

Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store