Re:Introduction to Decentralisation
by kerkeslager on Monday July 29, 2019 @12:21PM
(#20556235)
I think the point cryptica is making is that there is only one, central blockchain (logical centralization). This has a few centralizing effects on political centralization which is what most users probably care about:
1. Governments need only to track one blockchain to track every BTC transaction. Attempts to deal with this mainly entail coin tumbling, which involves giving your coins to a centralized trusted entity. Larger tumblers are more effective, creating an incentive for further centralization.
2. The central blockchain is a performance bottleneck to event throughput. Attempts to deal with this mostly have to do with federation, i.e. forcing people to transact through another entity (usually a company you pay fees to) if they want faster transactions. Federation is much closer to centralized on the centralized/decentralized spectrum. Usually companies respect regulation from centralized government (meaning a government could force them to not process your transactions) increasing centralization further. And historically, federation happens unevenly, i.e. a large number of email users federating under GMail, which creates further centralization.
3. Mining competition has a very high entry cost because the minimum investment for entry is very high. The solution to this is pools under a centralized pool manager who typically collects fees and may or may not collect data on pool members.
1. Governments need only to track one blockchain to track every BTC transaction. Attempts to deal with this mainly entail coin tumbling, which involves giving your coins to a centralized trusted entity. Larger tumblers are more effective, creating an incentive for further centralization.
2. The central blockchain is a performance bottleneck to event throughput. Attempts to deal with this mostly have to do with federation, i.e. forcing people to transact through another entity (usually a company you pay fees to) if they want faster transactions. Federation is much closer to centralized on the centralized/decentralized spectrum. Usually companies respect regulation from centralized government (meaning a government could force them to not process your transactions) increasing centralization further. And historically, federation happens unevenly, i.e. a large number of email users federating under GMail, which creates further centralization.
3. Mining competition has a very high entry cost because the minimum investment for entry is very high. The solution to this is pools under a centralized pool manager who typically collects fees and may or may not collect data on pool members.