LET’S GET SERIOUS with DECENTRALIZATION
What is, what’s not and what seems to be.
Decentralization: Its DEFINITION
Decentralization simply means the process by which the activities of an organization, particularly those that involves planning and decision-making, are distributed or delegated away from a central, authoritative location or group. The application of these concepts of decentralization has served group dynamics and management services in various fields like private business and organizations, political science, law and public administration, economics, money and technology. Decentralization has long been an agent of change and systematic reviews. It can alter history and change present situations depending on the variables involved. And today, people amass themselves and contribute to this self-acknowledged BITCOIN domain.
Decentralization is one of the most exciting aspects of blockchain technology. This removes the need for powerful central authorities and instead give back the control to the individuals. This system makes it more secure as consensus mechanisms acts as control panels that regulates the whole transaction process. And surprisingly many people are lured into this “decentralized blockchain” scheme without further studying and noticing the unseen behaviors outside the vicinity.
WHERE IT ALL BEGAN
Before money was invented, people started trading through the “barter” system. Although it was introduced more than 6000 years ago, its image in the trading system is becoming evident every time a new system of exchange is invented or introduced. Though one can obtain an item in barter in exchange for a service done, much can be implied in the present trading system, with currency as the leading money. Let’s not confuse ourselves with money and currency. Obviously, they’re not the same thing.
[Currency is simply medium of exchange but it can also be a form of money when properly addressed. Money is a store of value. Although money, currency and commodity can be a store of value, their meaning and usage changes in time in accordance to what the “law” states.]
Fiat money, as it is money only by “decree” ( a euphemism for “threat of violence”) — Wall Street Technologist
Barter is the oldest form of trading and both barter and currency can be subject to centralization, as we have seen in history, as it becomes a means of controlling an economy of a country, but can be as efficient and useful as it can be without these ill-intent of greedy people. As we start a new age of “internet trading” these factors cannot be ignored. With blockchain as one of the leading hot topics in the circulation, bitcoin and other cryptocurrencies are being on the hot spot for their yet untested characteristics.
“There is tension between centralism and decentralization and it is a political dynamic as old as civilization. The decentralized dream is partly about society going to the next level where layers of the value draining middle-men we suffer now are gone. These middle men tell us what to do, tell us what to think and charge us for the privilege as they gatekeep the juiciest intersections of our economies.” — Forbes
BACK WITH THE DECENTRALIZATION TOPIC
Much with history and stuff, let’s stick to the main question for this category: Is blockchain decentralized? Is bitcoin decentralized?
What makes blockchain technology decentralized (according to most definition)is the fact that it doesn’t rely in a single authority or a central point of control. Although blockchain is actually a database in structure, because it is a digital ledger that stores information in data structures called blocks, its chasm from database itself is much accredited to its use and function and their main difference is one of the “admin” a database has. That makes it, database, more centralized than blockchain.
Wait what? More centralized?
According to Nicholas Weaver, a researcher at the International Computer Science Institute and lecturer at UC Berkeley, “None of the cryptocurrencies are truly decentralized. They are actually centrally controlled by the miners, who can basically rewrite history at will.” And knowing that bitcoin miners are at the mercy of its Consensus Protocol, Proof-of-Work, it makes it clearer that the bitcoin blockchain “can” be rewritten by miners who have more power from their mining operation. Although it seems mathematically impossible, the fact that it can be done theoretically, makes the miners the de facto central authority in the exchanges and it’s almost the same for all cryptocurrencies out there.
Just when it seems that something is already decentralized now faces a centralization issue.
CryptoCompare, a blockchain and cryptocurrency research unit, said in one of its yearly taxonomy of the cryptocurrency sector, that an overwhelming majority of cryptocurrency and blockchain projects (cryptoassets) on the market today are centralized in one way or another. Even more startling, 85 percent of development teams have the authority to alter their cryptoassets’ protocol at their own discretion. That is nothing new! If one has already noticed, there are only about less than 20 mining pools out there, and some controlling large chunks of the underlying computer power, “could” conspire to attack the network!
Satoshi’s vision of a trustless and decentralized network seems to be becoming blurred in this chaotic upgrades and development, a term I coined to stir the minds of those who wanted something permission-less yet allows only a few to catch the train.
With the consensus protocols as determinants of writers and editors in a blockchain code, more and more consensus mechanisms are turning in themselves claiming to be “better” than the previous ones and with more than 10 consensus protocols to date, each mechanisms of agreement only gives power to those miners who are willing to “follow” the protocols thus allowing them of acquiring more power to overwrite the blockchain history — a not much different version of a database administrator.
Unless the consensus protocol gives the authority to the community in terms of mining and changes in the system, it cannot become a truly decentralized platform. One promising venture at the moment is the Proof-of-Transaction of Taucoin. Though it hasn’t shown itself much to the public yet, the much awaited main-net is sure to flood them with mobile miners as this was one of their promised-to-be-delivered technology. Otherwise, unless this turns out to be another centralized currency, Satoshi’s vision will become a reality through this simple and humble experiment.
Conclusion
There have been many discussions regarding blockchain and bitcoin mining altogether as it is nearing its energy-heated need for more energy consumption and the fact that blockchain is only suitable, applicable and available “only” as a currency such as the cases of cryptocurrencies now but the more intriguing argument is that if blockchain has a legitimate use in today’s world considering that “virtual currency” is no less than a “fiat money” controlled by the rich and powerful. Although bitcoin itself has better characteristics than fiat money, its very costly manner of mining and high volatility prevents it from being adopted by the masses. Slowly but surely — Bitcoin is telling us. Nonetheless, the future of any technology is not in the hands of the rich and powerful but of those who are willing to accept them and use them in their daily living.
Disclaimer
The views and opinions expressed in this article are those of the author and the author alone and do not state or reflect those of the blockchain and/or bitcoin community in general. However, under no circumstances, including, but not limited to, negligence, shall the author be liable for any special, incidental or consequential damages that result from the use of, or the inability to use, the materials on this article. Views and opinions mentioned in this article may not be suitable for somebody and one should make his own independent decision regarding them. This material does not take into account of any of someone’s financial situation or needs and is not intended as recommendations appropriate for anybody. It is advisable to do your own research about investments before engaging into one.
