Crude statements like this paper over so much of the reasoning and detail around the purpose of blockchains. It's so much more than a single dimensional configuration slider between centralized and decentralized.

I don't mean this as an attack or to be argumentative but could you elaborate on why it's so much more than a single dimensional configuration slider?

A comment with a statement or assertion and no reasoning is very difficult to discuss.

I could create a long list, but to start, it's not directly controlled by a single individual or organization. The mechanism used to assert leverage is different than typical centralized systems. It's not a contract or a special governmentally assigned right or physical intimidation that "centralizes" the network. It's simply computing resources. But unlike other centralized systems, anyone anywhere with enough of those resources could assert the same leverage on the network as anyone else. Furthermore, because of its distributed nature, even if someone had a majority of computing resources mining the network, the protocol is designed to disincentivize participants from cheating as it would destroy the value of the network. And they couldn't even tamper with the ledger, as public key cryptography is used to sign transactions, so they could only stop transactions from happening. It is also fully visible and transparent.

This is fundamentally different from your typical centralized database sitting behind physical walls with physical security and governmental protection that a single entity could mutate and obfuscate at will.

Technically the Ethereum network is majority owned by Vitalik Buterin and the folks who payed 0.50 USD (likely much less, if paid in BTC mined earlier).

72,009,99 of the 101,684,297 Ether means the Ethereum network has a worse Gini coefficient than North Korea or really any Fiat based economy.

See also: "Quantifying decentralization"

https://news.earn.com/quantifying-decentralization-e39db233c...

>likely much less, if paid in BTC mined earlier).

You realize that bitcoin is money, right?

It's like saying "You can afford to sell me your house for $10k today, afterall you only bought it for $5k back in 1910".

When the BTC was spent at the time of the ETH crowdsale... the person doing the buying compared options of:

A) Selling BTC at prevailing prices

B) Doing nothing

C) Spending BTC on ETH at prevailing prices

Another analogy:

Because you bought a car today for 30k, funded by the 150 shares of AAPL you sold just now.... means you only realy paid 3k for that car because you bought AAPL shares cheaper in the 1990's.

I'm just pointing out the absurdity of the statement and the significant misunderstanding about the nature of capital.

Then going on to talk about the Gini coefficient as though it means anything at all seals the deal that you are out of your depth and just trying to sound smart

You realize Bitcoin/Ethereum are simply computer software right?

And you missed the essential caveat; aprox 4.11% of Bitcoin addresses control 96.53% of all BTC in circulation. This is a conservative estimate, as anyone familiar with how Bitcoin addresses and wallets work, would know one user is likely controlling many addresses.

A perfect example of this, is a few days ago 1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a created a script to subdivide 111,114 BTC into several hundred addresses, from 60,000 / 30,000 / 20,000 / 10,000 / 5,000 / 500 and then to 100 BTC accounts, over the course of a few hours. [2] Following the movement here now leads to recent deposits into the Binance and Bitfinex wallets.

And most importantly, on the computer science behind Ethereum - In any DLT network with an adversarial threat model it's impossible to create a smart contract with any functionality relying on external data inputs (betting on the outcome of a sports game, or tracking any real world data input) within the network as there's no way to validate the authenticity of that data unless a trusted 3rd party is designated, at which point the network becomes useless. Not even to mention the question of why anyone would want to use a token with such wildly fluctuating market price, and who's supply is controlled by a small userbase of oligarchs.

Additionally, the entire cryptocoin market has an Achilles' heel.. Tether, and Bitfinex are widely suspected of counterfeiting aprox $4,000,000,000 USD (by producing USDT for free anytime they want) [3] [4] [5]

[1] https://www.sec.gov/rules/sro/cboebzx/2018/34-83520.pdf

[2] https://www.reddit.com/r/Bitcoin/comments/9bfnff/near_1b_are...

[3] https://medium.com/@bitfinexed/latest

[4] https://blog.chainalysis.com/reports/tether-aug

[5] https://www.bloomberg.com/news/articles/2018-08-24/not-even-...

I think "centralization" is pretty ambiguous. Is Bitcoin centralized? Full nodes can be run on home PCs, so verification is decentralized, but only ASIC mining is profitable, so mining has become highly centralized. The Lightning Network adds additional roles, like payment hubs and watchtowers, with varying degrees of centralization.

So we can't characterize Bitcoin as a whole as centralized or decentralized. We should talk about specific roles, and the various attacks that could be performed by coordinated members within each role. Like we could talk about the possibility of Bitmain coordinating a 51% double spend attack, or the possibility of a major LN hub bribing watchtowers to ignore foul play.

How are markets centralized, exactly? If centralization and hierarchies were the answer to all complexity, then the feudal system would still be relevant.

Markets are complex, organic things, with a lot of players.

Really? funny to think we are anything but feudal. Markets may have large number of players but the number of players which matter are much less.

I'm not even sure what you mean by that, but if you think we have anything remotely resembling a feudal economy, I invite you to do more research into history.

That's why planned economies work so well, right?

centrally planned economies do not work well, but the focus here lies on the word 'central', not 'planned'. All economies are planned to a significant degree, albeit in corporations (which internally do plan rather than rely on market mechanisms). The equivalent of cryptocurrencies in the economic sphere would be turning every company into an army of independent individual contractors whose only tool is the legal contract. This would lead to unmanageable complexity and overhead that would be unacceptable and very soon end in people naturally organizing in competent hierarchies, producing the dreaded institutions and middlemen that cryptocurrency tries to do away with.

Read for this very question Coase's essay, The Nature of the Firm.

I've read Coase. The equivalent of cryptocurrencies in the economic sphere would be exactly what cryptocurrencies are: partially decentralized. Firms form due to the transaction costs of decentralization. Mining pools form due to the transaction costs of decentralization.

  Mining pools form due to the transaction costs of decentralization.

Better explained as a result of the mining protocol being winner takes all, and is granted write access authority (for guessing a increasingly larger random number), that by pooling everyone's lottery tickets together and paying the pool operator, the agree to take a small sum of each successful guess from the pool (assuming the pool fairly pays out participants).

"decentralized" except not.

Variance is a transaction cost.

Obviously there is a happy gray between completely black and completely white.