Is Blockchain really decentralized?
When people learn about Bitcoin or cryptocurrency for the first time, Blockchain technology always comes up. In addition, the term decentralized always comes up. The example that is often given is the we don’t need a “bank” with bitcoin as it is decentralized. But is decentralization just an illusion?
When I first researched about Bitcoin and Blockchain I thought how cool is that! “The world” controls the ledgers and it is therefore immutable . However, the reality is that these miners are not really independent (it may be what Satoshi Nakamoto envisioned) because miners now have to work in large pools to solve the cryptographic problems and it is nearly impossible for a single miner to do this on their own.
From the https://blockchain.info/ website we see that the top 4 BTC miner pools (BTC.com, AntPool, BTC.TOP, and ViaBTC) control the majority of the Blockchain capacity. Could the double spending problem be at risk if these 4 companies colluded to corrupt the system? Furthermore, the pools with the most computing power are located in China giving a single country control over the future of Bitcoin and has potential for deception.
In the same vain, I argue that Steem and its Blockchain are not decentralized. The developers and a few other people have a lot of influence on what happens to the future of Steem. The highest single account (please correct me if I am wrong) @steemit holds 44,041,074 Steem Power! This account holder along with other witnesses control the majority of the platform's Steem Power and together have the power to influence the future of Steemit.
As a plankton (I know not even a minnow lol) in the Steemit ecosystem my votes have very little influence. My understanding was that the Steemit social media site would have a self governance within the community but this seems to breakdown when you have members that have so much more influence to set policy.
Don’t get me wrong, Steem is great and Blockchain technology is a game changer and I am trying to learn as much as I can about it. Blockchain has been described as the “Trust Machine” because of the decentralized nature of it, but my question to my fellow Steemians: Is the Blockchain really decentralized when we put our trust in a few, rather the entire community?
Thank you for reading.
Please comment, correct, and educate me.
Cheers!
Ian
BTC mining pools have made it very centralized, and ethereum mining pools are even worse. This does not make all blockchains centralized IMO. Perhaps proof of work is outdated and (like Steemit) the way forward is DPOS or delegated proof of stake. Or delegated proof of work. Or there needs to be more tweaking in the POW algos.
I agree that many, if not most, of the coins we have today have an issue with distribution and going forward I hope that more can tackle the issue.
That being said, I still think a mining pool/cartel is more incentivized to keep things censorship resistant than any gov't agency.
Hey @banksyissatoshi thanks for your reply. I will definitely look into DPOS.
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Thanks!
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At the beginning of a coin the early adopters usually own the most because they are the first holders. As time moves forward I would believe the distribution of the coin will increase to other users and hence make less centralized. If a coin truly can not be decentralized not a lot of users would hold the coin. Thanks.
Thanks for your comment.
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