Decentralization refers to many things, it depends on the discussion.
No it doesn't. Decentralization in cryptocurrency always meant being able to make transactions without a central controlling authority. Someone has mislead you to a strange backwards rationalization to say bitcoin is unique.
they also do validation which is why its important for wallet owners and services to run their own nodes even if they dont mine.
They might validate blocks before rebroadcasting them. This is not the same as miners dictating the ordering of transactions that goes in to a block. These are two different things. One is vital, one is a very minor convenience. Have you read the actual bitcoin pdf? Have you read about cryptocurrencies outside of /r/bitcoin ?
It actually isn't crucial for someone to run their own node, someone just needs a way to query the current state of the chain.
Yes, it is because they are highly centralized chains that might as well run on sql and/or ghost chains with no users.
Where are you getting nonsense like this? This is circular logic, your 'evidence ' is just saying the same thing over and over. Ethereum has had more transactions than bitcoin for the last four years. Here is actual evidence:
Yes, offchain transaction batching is a good scaling strategy. Satoshi recommended it as a solution.
Satoshi recommended lifting the block size limit and having relatively few nodes that could handle huge amounts of on chain traffic. I don't remember anything about stopping at 1.166 KB/s as throughput.
I assure you, running one costs a lot more than 10$/month. Perhaps you should check the math on your claim.
Your evidence is "I assure you" ? I'll show you actual evidence and you can check my math.
Here you can see a 700KB average block size roughly every 10 minutes. That is 1.166.66 KB/s
A $10/month VPS will have a 1 gigabit connection. That is going to be 125 megabytes per second. That is 107,204 times faster than the bandwidth of the bitcoin network. The entire bitcoin blockchain is only 437 gigabytes. That VPS could download the entire chain from the last 13 years in about an hour. To give you some reference of how much faster that is than what is needed, an SR71 blackbird at a top speed of mach 3.3 is only 75,600 times faster than a slug.
As for drive space, the entire chain will fit on a 512 GB thumb drive. These can be bought for $40 USD. Here is where the average fee for a single transaction was over $62 USD. A average single transaction cost more than storing the entire chain on an SSD because of the terrible bitcoin throughput.
I would check your math, but you didn't give any at all. You have been taken in by a complete lack of real information. Try asking about it on /r/bitcoin and watch your comment be deleted or shadow banned. There is a reason you aren't getting any real information.
Saying something isn’t decentralized in the crypto world can mean any of a number of things. The problem is that decentralization isn’t one specific thing that can be measured. There’s absolute centralization like a mainframe controlled by a single individual not connected to the outside world. Beyond that nothing else is absolute, there’s just varying degrees of decentralization.
You could have a slightly decentralized governance like a consortium that votes on how to manage the mainframe. You could have a distributed network of computers all managed by a single entity. Each of those have elements of centralization and decentralization. Within those categories there is varying levels of decentralization. For instance there could be a completely democratic organization that votes on how to manage the mainframe or more of a republic style where members vote on a person to manage the mainframe for them.
So, when someone says something isn’t decentralized in the crypto world they typically mean some element is centralized or is slightly less decentralized. For bitcoin you will see people say this in reference to large mining pools that have the power to control consensus to a certain extent. For NEM, they’re probably referring to the fact that the nodes that control the network are closed source. Since they are closed source that means one entity can control the direction of the network, and one can’t simply fork what they’re building.
I’m of the opinion that there will never be complete decentralization, and every project will have some degree is centralization. We’ll get better with time, but I think decentralization is an inherently intractable problem.
No, not all cryptocurrencies are decentralized. There's nothing about a blockchain that requires decentralization. It's a key tenet of some of the coins, but not all.
Decentralization is one of the defining traits of a cryptocurrency. It's like saying a car is an airplane, but without wings. It just doesn't make sense.
They were not my words, I was merely inserting a lame joke.
As far as I know, there's no technical metric to measure decentralization, instead it's something to reason about, as it can touch many aspects.
However, if you insist on finding a key aspect that indicates how centralized or decentralized a protocol is, the answer typically lies in nodes. How many are there and more importantly, how accessible is it to run your own?
With Bitcoin, anybody can run their own node, even on modest hardware.
With Ethereum, considering the future PoS switch, only rich people can run a node, unless you join a pool. The minimum ETH required is 32 ETH, which make it an elite thing. Worse, those elites will get even more ETH as a reward. This doesn't necessarily mean ethereum is not decentralized at all, just less so compared to Bitcoin.
A worst example may be ICP (Internet Computer) where running your own node is close to impossible.
Ethereum is not decentralized. Decentralization is the most important thing in a blockchain. The sooner everyone realizes that, the sooner we can start building momentum on the chains that are viable.
If you read my #2, I basically acknowledge that crypto is decentralized. What I argued is that decentralized does not mean what the vast majority of people thinks it means, which is that it makes financial system more democratic. Many including myself are taking exception to that misconception.
True, Decentralized systems != Cryptocurrencies, but email, BitTorrent, and Git are different from what Bitcoin, Ethereum, and other blockchain system provide.
Blockchain-based systems allow storing a shared, verifiable state. Anybody has a chance (depending on mining resources) to make a decision regarding the next state change in the system by mining the next block, but this block will be rejected if the state change is invalid (e.g., in case of Bitcoin a transaction spends non-existing funds).
This is very different comparing to existing technologies that usually store state in a centralized place that is owned by a single company.
A benefit of full decentralization that is commonly mentioned is that this system is hard or even impossible to censor since even if a nation-state decides to stop transactions from a single actor, mining nodes in other countries will process these transactions fine.
Another benefit is that since all state changes are verified by every other node, it is impossible to perform invalid transaction changes. For example, a bank can reduce everyone's accounts by 5%, but Bitcoin network won't do this.
My questions are: how important these benefits are for practical purposes (mind that we are talking about public, permissionless blockchains here), and can we go away with faster but less centralized systems like NEO?
You and the other commenter both quoted the same aspect about agreement of the community, so see my other response.
> Decentralization in this context would mean different rules for every participant, which is not something that we want - an extreme example of individualism where everyone has different beliefs, so a group cannot accomplish anything.
That is quite interesting, thinking of extreme individualism. But in thinking about that, isn't that what the entire ecosystem of cryptocurrencies is currently doing, and any one particular cryptocurrency itself is a point of centralization?
Again, I'm just tugging at a thread here, trying to understand how it's supposed to be even conceptually possible to be "decentralized". It just seems to me that we are talking about a different form of centralization - which may be a good thing! Possibly centralization of choice, as opposed to centralization with regards to physical location (i.e. which country you live in).
Because there are several different kinds of decentralization and it's not black and white.
Miner decentralization is important is the whole security model relies on nobody controlling >50% of hashrate.
Developer centralization is another important point. BTC arguably fails at this when a small group, combined with extensive propaganda campaigns, artificially constrains Bitcoin's throughput. There are no valid arguments against raising the blocksize to 2MB for example.
Then there's node centralization, wealth distribution and maybe other types I'm missing.
The parent comment was saying bitcoin is the only decentralized cryptocurrency, which is ridiculous and has nothing to do with ledgers, it is about the mechanics of synchronization. If someone told you anything different than this, you might want to diversify your sources of information on how these things work. Saying bitcoin is the only decentralized cryptocurrency is like saying yahoo is the only website that exists.
“Blockchains are politically decentralized (no one controls them) and architecturally decentralized (no infrastructural central point of failure) but they are logically centralized (there is one commonly agreed state and the system behaves like a single computeR”
I think you’re mistaken that I don’t know how Bitcoin works. Not only do I know, but I have spoken to many teams doing work in the last 10 years in various alternative systems, and I have even designed alternatives myself.
I used the word server in my analogies. The transactions are, however, all going through one COMPUTER which receives them, puts them in a envelope, and finds the right PoW input to “seal” the envelope, and sends it out to everyone. Whoever does that first, gets the rewards on that chain. If the transactions do not make it into the block, they don’t count on-chain.
Therefore, every 10 minutes, ALL TRANSACTIONS IN THE WORLD must be gathered by one computer, the one that will happen to mint the next block. This is a bottleneck, and it is the cause of the skyrocketing fees whenever the system sees any on-chain adoption.
But it’s actually worse than centralized — because we don’t know who will mint the next block so we have to send everything to on everyone. Imagine if all BitTorrent nodes seeded every file in the world. Bitcoin failed as a peer to peer cash system because of this topology and people on the group were telling Satoshi this back in the day.
“Decentralization” has been the argument ideologues have fallen back on time and again in crypto. It’s never well defined and typically used to oppose policies that would promote low transaction fees or increased transaction throughput. It’s why things like Solana which is focused on massive scale and low fees have found a foothold. Ethereum is repeating the mistakes of Bitcoin
I still have trouble understanding how a system designed to facilitate global consensus can be considered decentralized. Sure maybe the hardware is decentralized but the resulting data structure is just like the centralized systems it aims to replace. Call me when your cryptocurrency is offline first.
Ok, I see. Still it seems like the dream of cryptocurrency was total decentralization. If the supply is centralized does it matter if the transactions aren’t? It’s still a single point of failure.
Maybe it's a good time to remind that Bitcoin is not Ethereum. Bitcoin has always focused on maximizing decentralization. This debate goes back to blocksize war in 2015-2017, when small blocks and decentralization won over big blocks and increased throughput. The idea is simple; the network is more decentralized, when more people can reasonably run a full node on their own home computer. It is possible to run a full Bitcoin node on a typical laptop or desktop PC, or a dedicated Raspberry Pi with external 1 TB hard drive. It doesn't mean that everyone has to run their own node; it's enough that it is possible.
For Ethereum and most other altcoins, it's not possible to run a full node on a home computer. That's why most of the nodes are run by companies such as Infura.
This is also the root of the argument why many bitcoiners think that most altcoins such as Ethereum are scams. Like the article suggests, they're promoted and sold as decentralized but in reality are quite far from it.
Bitcoin is extremely centralized. Every transaction is recorded in a centralized ledger. That ledger may be distributed, but that's not the same thing as being decentralized.
Decentralization is a security and censorship-resistant feature of Bitcoin. All transactions must go through a miner, but the only way to mine a block is by solving a SHA256 hash in competition with tens of thousands of other miners also trying to solve for the hash all around the world.
There is no way of saying 1% owns 92% (after all, I can churn out a million addresses used purely for one-off transactions, if desired, that's totally acceptable, wallets are practically free to produce). But it wouldn't matter if it did, because distribution of Bitcoin does not affect its security or censorship resistant properties. All transactions get the same amount of security. All holders are equal in terms of protection provided by the network.
Concentration of ownership of any capital asset is going to follow a Pareto distribution. That is not unique to Bitcoin... it's true of everything from stamps to stocks. Bitcoin never made the claim to some sort of idealistic theoretical "even" distribution as if that would be fair, but I digress... Bitcoin is also not the end all be all of crypto assets, and plenty of additional capital value has been distributed among the long tail of crypto assets that have cropped up since (over 60% of crypto's market cap is among other crypto assets).
Mining pools are not centralized entities. They are loose organizations that miners join to even out the yield on their mining equipment. A miner can fluidly leave and re-join a different pool at will. The pool's sole function is to smooth out yield. If a pool fails to do that, it loses its miners. It's not some central entity that can command the miners in it to 51% attack the network. That's not how pools work.
But even if they did, it would be painfully obvious that it was happening, and the Bitcoin community would mount a response, which may include a hard fork if desired.
I am more involved in the Ethereum community than Bitcoin. The lure is that I can borrow and send six figures worth of crypto in 2 minutes, and deploy it to a smart contract multisig and create an on-chain organization in a single afternoon that is used to deploy capital for anything from charitable fundraising to art commissions and auctions to online gaming production to startup operations. I can coordinate across jurisdictions frictionlessly. I can retain my assets when moving across borders. I can retain true ownership and custody of my funds without any central parties. I can earn yield on my funds by lending it out to on-chain options markets. I can fund any one I want on the internet without Paypal's permission or blessing. I can move to a third world country and still retain all of these capabilities.
It's not going anywhere, it's hugely valuable. It continues to get more powerful and more user-friendly.
No it doesn't. Decentralization in cryptocurrency always meant being able to make transactions without a central controlling authority. Someone has mislead you to a strange backwards rationalization to say bitcoin is unique.
they also do validation which is why its important for wallet owners and services to run their own nodes even if they dont mine.
They might validate blocks before rebroadcasting them. This is not the same as miners dictating the ordering of transactions that goes in to a block. These are two different things. One is vital, one is a very minor convenience. Have you read the actual bitcoin pdf? Have you read about cryptocurrencies outside of /r/bitcoin ?
It actually isn't crucial for someone to run their own node, someone just needs a way to query the current state of the chain.
Yes, it is because they are highly centralized chains that might as well run on sql and/or ghost chains with no users.
Where are you getting nonsense like this? This is circular logic, your 'evidence ' is just saying the same thing over and over. Ethereum has had more transactions than bitcoin for the last four years. Here is actual evidence:
https://bitinfocharts.com/comparison/transactions-btc-eth.ht...
Yes, offchain transaction batching is a good scaling strategy. Satoshi recommended it as a solution.
Satoshi recommended lifting the block size limit and having relatively few nodes that could handle huge amounts of on chain traffic. I don't remember anything about stopping at 1.166 KB/s as throughput.
I assure you, running one costs a lot more than 10$/month. Perhaps you should check the math on your claim.
Your evidence is "I assure you" ? I'll show you actual evidence and you can check my math.
Here you can see a 700KB average block size roughly every 10 minutes. That is 1.166.66 KB/s
https://bitinfocharts.com/comparison/size-btc.html#3m
A $10/month VPS will have a 1 gigabit connection. That is going to be 125 megabytes per second. That is 107,204 times faster than the bandwidth of the bitcoin network. The entire bitcoin blockchain is only 437 gigabytes. That VPS could download the entire chain from the last 13 years in about an hour. To give you some reference of how much faster that is than what is needed, an SR71 blackbird at a top speed of mach 3.3 is only 75,600 times faster than a slug.
As for drive space, the entire chain will fit on a 512 GB thumb drive. These can be bought for $40 USD. Here is where the average fee for a single transaction was over $62 USD. A average single transaction cost more than storing the entire chain on an SSD because of the terrible bitcoin throughput.
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
https://www.amazon.com/SanDisk-512GB-Ultra-Flash-Drive/dp/B0...
I would check your math, but you didn't give any at all. You have been taken in by a complete lack of real information. Try asking about it on /r/bitcoin and watch your comment be deleted or shadow banned. There is a reason you aren't getting any real information.
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