Decentralization works great for small communities and use cases. The moment you start scaling you run into a myriad of problems:

- fraud/abuse (spam)

- outsized influence of providers who make it easy to get on board without having to self host (gmail)

- inability to easily change your protocols to handle new features (IMAP4 is from the 90s)

- inflexibility to easily fix bugs and distribute patches across the entire fleet

- unequal footing in both feature capacity and security posture from node to node

Email, Matrix/Riot, etc all suffer from these problems. As does bitcoin. That's not to say that they're not overcomeable, but many of the challenges (especially fraud/abuse) require close collaboration between different decentralized node owners - which to some, defeats the purpose. I ask, what is the internet if not a way to communicate, so I guess I don't think it defeats the purpose.

I'm actually interested to see what matrix is doing, because they seem to realize that a platform of decentralized nodes that handles a lot of the challenges (updates, auth, etc) means that people will be able to build their own new use-cases on top of the network, or diverge.

Anyways, despite these problems, despite the uphill battle in user experience, despite the pain of self-hosting, despite all of the challenges: I still do it.

The internet is a miracle and one way to keep it a miracle is to take the reins of your presence on it.

This is the blockchain trilemma: Decentralization, Scalability or Security, choose only two.

That isn’t the trilemma - it’s decentralization, scalability and global state.

That's true for distributed computing in general so it has nothing specifically to do with the blockchain protocol itself.

Global state? Please explain more.

Perhaps they meant global consensus?

How is global consensus not global state?

What are we consensing on, if not a mutually agreeable set of facts (state) that we can use as a basis for future decisions?

If the answer is “nothing” then you by definition have a toy, not a tool.

I suspect they’re referring to how some blockchains (eg ethereum) are using sharing and lightning to scale

It has been solved long time ago. Just remove the PoW its not needed. XRPL did it first others followed.

Ripple is not permissionless. I think Algorand[1] is the first.

[1] https://people.csail.mit.edu/nickolai/papers/gilad-algorand-...

That Algorand paper suggests a way of scaling consensus to large numbers of nodes, i.e. by running a consensus algorithm on a random sample of nodes. It doesn't address scalability with respect to transaction volume, which is what people usually mean in the context of the blockchain trilemma.

>It doesn't address scalability with respect to transaction volume.

For scalability with small transaction volume, Coda[1] is the best.

[1] https://codaprotocol.com

Thats laughable nonsense tbh. People should "mine" to compress the blockchain lol. The blockchain isnt even needed (the history). Have a look at XRPL srsly its the perfect example it has terabytes of past transactions and they are stored by some nodes but its not needed to make progress. And ofc it could be compressed but that totally destroys its purpose. If you want the transactions you want to be able to query them which you cant do efficient if its compressed.

History is very much needed to verify that the current state was arrived at by following the rules.

No, that's commonly made up thing coming form bitcoin where "balances" don't exist and the state of the ledger is defined by chain of past transactions. It is a design decision not a fundamental rule. It does not apply to the XRPL where each closed ledger has to follow all rules and contains all information to make forward progress. For example if a balance would be made up it would guaranteed violate a rule now (in the current ledger) there is no need to know the past transactions because if you add balances that would change the sum of all balances which obviously violates the rules. So form that point on each following ledger would be obviously and known in real time to be invalid. In reality ofc that cant happen because the software would simply not include a transaction that causes the invalid state. If for any reason there would actually be something considered "wrong" in the past it would not have any effect. The system is the code itself all participants agreed on running the same code and agreed on that what the code deems valid is valid and unchangeable forever. A bug can be fixed but what it caused in the past cant be. So the whole validation thing is useless it was validated already by the rules (the code) that was running back then. Validating it again with a bug fixed version of the code is useless. Just like if you would find an error in the bitcoin blockchain that validated fine with the version from that time. So what? it doesn't matter it cant be changed and if someone sends you bitcoins he only has because of a bug how does that matter if it don't change anything in the presets? You don't have to trust that no mistakes where made in the past you only need to trust that the past cant be changed to rely on the system in the presets.

Here's an example how you can validate the current state without knowing the past.

Imagine there are 100 coins made form something that does not exist beside in these coins. Someone wants to pay something to you using 2 of these coins. Do you need to know where he got them from and where the person before got them from and so on? If you know there are only 100 in total. (state is public) And no way to change that. (rules/code is known) And you know that if you take the 2 no one can force you to give it back. (transactions are irreversible) Then no, you don't need to know the past transactions at all. Maybe they where stolen in the past a thousand times also lost and found by someone else many times. Does it matter? Not at all.

The need to verify history applies to all cryptocurrencies, including account-based ones like Ethereum and XRP. You can assume the current state as valid and verify from there on, but then you're not a fully verifying node, and you risk being fooled by some peers presenting you with a made-up current state.

You just repeated yourself and you are still wrong. Maybe read my message or inform you somewhere else. There is no way for anyone to fool you with a made up state. The systems state is public remember? It's up to you from whom you get it but usually from one node and the hash from many others to verify that all have the same state) And unlike with bitcoin there cant show up a longer chain later.

You didn't even say permissionless in your post. Ripple is a company you mean the XRPL. The XRPL is permissionless in every aspect. You can insert transaction without anyones permission. You can run a node without anyones permission. You can fork and create you own version without anyones permission. You can change code and create an amendment without anyone's permission. It needs 80% favorable votes for two weeks to become active but it doesn't need anyone's permission. There is no entity that can vote against it and prevent it.

I think you point out a lot of issues with decentralized services that lead to centralization.

Matrix is exciting, but still has the hosting problem. Even with the easy ability to get a host from them for $10/month you're still going to have a handful of players providing most of the hosting.

I think Urbit's design is actually really interesting and makes some progress on a few of these problems.

> Fraud/abuse (spam)

Their ID model that has inexpensive and limited IDs that require some cost ($10-20) change the economics on spam. IDs carry a reputation.

> Outsized influence of providers

Urbit still has some of this in the sense that where you host your 'planet' (basically your private server) will probably end up being dominated by centralized groups that do this work for you. Where it's different though is the design of urbit means your server is only accessible by you and the communication is still p2p/encrypted. It's a little like Matrix in that way, but the design makes install and updates way easier.

The other cool bit is that the p2p complexity is abstracted away at the application layer, so things are decentralized by default without the users having to be aware of any of that complexity. You'll eventually be able to share photos from one user to the other and no centralized server is required.

> Bug fixing across fleet

Urbit's hierarchical structure is a good solution to this too. There are 256 'galaxies' which are voting governance nodes in the network. Each of these spawn 256 'stars' (basically infrastructure nodes) and each star can span 65,536 'planets' (individuals IDs or private servers for users). Updates come down the pipe from stars and get seamlessly applied to all users on the fleet.

User planets can escape to a different star if their star becomes a problem. Stars are incentivized to remain up and neutral in order to stay relevant. Similarly stars can escape to different galaxies if there's an issue with theirs. In an extreme case a 'stellar congress' could push back against the galaxy governance body if they had to and start reporting to their own.

- unequal footing in both feature capacity and security posture from node to node

The OTA approach and functional VM design solve this for Urbit.

https://urbit.org/using/install/

A more detailed introduction: http://hyperstition.al/post/urbit-an-introduction/

Anyway - I've playing with it for the last few months during lock down and it's the most interesting thing I've seen in a while.

i wrote that second link :) delighted to see it in the wild

Cool! - I thought it was a pretty good summary of a lot of the details.

Thanks for writing it.

"one-CPU-one-vote" comes from Satoshi contrasting the alternative of "one-IP-address-one-vote".

It's not about equality but fairness. Anyone can invest and purchase CPUs whereas the allocation of IPs is political. Satoshi never stated or expected one CPU should map to one individual person.

Satoshi said "At first, most users would run network nodes, but as the network grows beyond a certain point, it would be left more and more to specialists with server farms of specialized hardware.” – https://satoshi.nakamotoinstitute.org/emails/cryptography/2/

“The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don’t generate." – https://satoshi.nakamotoinstitute.org/posts/bitcointalk/287/

Thanks for this, I wasn't aware of these quotes that definitely provide important context for my comment.

I think my broader point stands, though: despite engineering efforts towards decentralization, market forces push Bitcoin towards centralization (due to mining pools and due to consolidation amongst manufacturers of mining hardware).

The most important counterbalance to this is not in the Bitcoin protocol, but also an economic one: large mining operations have an interest in keeping up (at least the perception of) decentralization, because that's why people like Bitcoin.

At that point however, you're back to a system where the safeguards are not of a technical nature at all. Maybe Satoshi foresaw that to some degree, but apparently he wasn't able to engineer around it.

You will notice how all those giant servers are all located in first world countries where the infrastructure and political stability is good.

Is this sarcasm or you're calling China "where the infrastructure and political stability is good"?

I mean, no-one’s denting the technical accomplishment of bitcoin, but if the envisaged final scenario was power in the hands of the rich what the heck was the point?

The purpose of Bitcoin is a digital currency where no central authority can debase the currency. Bitcoin stands in contrast to bank currency like the dollar, where central banks inflate the money supply to prop up the insolvency of their government and its banking cartel.

The fact that mining is a capital intensive operation has little to do with Bitcoin’s decentralization. Nodes cannot change the supply. When I wake up tomorrow I’m reasonably certain there will still be ~21,000,000 bitcoins, while the central bank will have further inflated the money supply https://upload.wikimedia.org/wikipedia/commons/thumb/c/c4/Co...

There’s nothing wrong with what you’re saying, but I find it hard to see why that matters. I mean, 1) bitcoin still isn’t a currency and there’s no signs of it becoming one 2) the banks and governments seem fine. It’s definitely gaining in value, but so is Apple stock and gold.

But more generally, I don’t see the point. We’ve established that the people who end up with lots of bitcoin are people with lots of fiat money (and some early investors), so all you’re doing here is perpetuating the current economic distribution, and frankly fiat currency and the corresponding banking system is very effective at that already.

Someone else having a lot of capital doesn’t prevent me in any way from acquiring or creating wealth. That somebody has more money than me doesn’t concern me.

You’re right, gold and stocks can also preserve capital against the constant depreciation of fiat currencies. I prefer bitcoin to gold because I can more easily hold my own bitcoin and transfer it globally. I don’t own stocks because I don’t care to tie my savings to the performance of various businesses.

Has there been an attempt to create an "one-IP-address-one-vote" cryptocurrency?

Huge advantage, no electricity waste.

Should allow for much larger transaction volume as well. IP-address vote flows naturally since well we are still using IPv4 to communicate.

The only downside would be that there would be some big winners in Apple,MIT,US Postal Service that is anyone else with 8/block.

Countries like Chad with 4096 addresses for population of 10M would benefit much less but they would still be in the game.

The opportunity cost of electricity, what you call waste, is the most apolitical and ungameable resource available. Every other example to "vote" I've seen quickly devolves into another political game.

Pretty sure Satoshi knew ASICs would eventually come. We miners were talking about them in 2010 on the forums and IRC when he was still around engaging with the community

Of course he foresaw that.

You can exchange money for CPUs, so the system was built so that those with more money have more influence over the blockchain.

The idea of votes being proportional to the dollars you control is very popular in some circles.

In contrast, one-person-one-vote systems tend to create regulation for financial institutions, which is something crypto currencies often like to avoid.

That consequence doesn't follow. Capital intensive mining does not make the blockchain any more decentralized, as long as miners doesn't collude enough to form a single majority. Game theory suggests that financially motivated attackers would do best to avoid that however.

Even if ASICs were not mentioned by name, Sastoshi wrote about how mining was expected in the future to be the work of large bank-like organizations, but apparently did not worry that this would harm the project.

What he may not have foreseen was the emergence of mining pools, separate from miners themselves, that in certain ways can behave like cartels. That could have been avoided with a mining pool protocol where miners are the ones to form blocks, but the software included no possibility to pool mining power at all.

Mining pools aren't inside the protocol. They collude outside the protocol.

Collude to do what though?

> protocol where miners are the ones to form blocks

Miner's would identify themselves

The only cryptocurrency that has achieved the "one CPU one vote" goal is Monero. RandomX is an impressive feat; I encourage you to look at the technical specifications and the security audits it has been through from notable firms.

> aren't as decentralized as claimed

This is a vague notion that doesn't make any sense. The purpose of the design of Bitcoin was not to give equal representation to every CPU. It is to prevent undue interference in transactions by third parties. And by that measure Bitcoin is definitely decentralized enough.

To do anything nefarious you need at least 51% of hash power and to not care that you are damaging the integrity of the blockchain, and even then you can't steal from or rewrite the blockchain - you can only prevent future transactions from going through.

A 51% attack can rewrite previous transactions in the Blockchain.

That just isn't true. Please don't spread misinformation about what you don't understand.

https://academy.binance.com/security/what-is-a-51-percent-at...

The binance article is confusing. It says transactions can be reordered, but not reversed. The reality is that someone in control of 51 pc can change the history (because that is what is required to reorder transactions) .

You are just going to state something that is blatantly false without any evidence or references? The nature of 51% attacks is pretty well known among the cryptocurrency community, and it's not hard to understand the technical aspects of it. You can't rewrite history because you don't have the private keys to the wallets you want to steal coins from. It's impossible. You can only affect transactions around the time of the attack.

https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_...

https://bitcoin.stackexchange.com/questions/658/what-can-an-...

"An attacker that controls more than 50% of the network's computing power can, for the time that he is in control, exclude and modify the ordering of transactions. This allows him to:

* Reverse transactions that he sends while he's in control Prevent some or all transactions from gaining any confirmations

* Prevent some or all other generators from getting any generations

The attacker can't:

* Reverse other people's transactions

* Prevent transactions from being sent at all (they'll show as 0/unconfirmed)

* Change the number of coins generated per block

* Create coins out of thin air

* Send coins that never belonged to him"

That’s not what “rewrite history” is generally accepted to mean. Substituting historical transactions with alternatives, and thereby reverting all dependent transactions is rewriting history. By doing so you can invalidate any transaction, so long as you control at least one input in the ever expanding web of prior transactions.

But that once again is only current transactions. It gets exponentially harder to interfere with transactions with each block in the past. And if you just decided to do so with arbitrary hash difficulty to make it faster, it will be very obvious and easy to reject.

Not if you control more than half of the hashpower. Then it’s just a matter of time.

Please don't spread misinformation about what you don't understand. Look up what a re-org attack is. Frankly, binance and other exchange websites are bad ways to learn about the bitcoin protocol.

Ummm.... There is literally already a name for this attack. It is called a reorg attack.

Doing a reorg of the blockchain can cause all sorts of problems, and reverse all sorts of things, depending on what those transactions were, and how they are re-ordered.

Other posts have pointed out that he did forsee that. However if we want to prevent specialized hardware from taking over, we do have a very easy solution in the form of memory-hard hash functions like scrypt or argon2. These didn't exist back in the day, but its a very trivial change to the bitcoin model (and thrre are coins that use these) so its not like this represents some fundamental architecture failure in bitcoin.

Memory hard PoW doesn't prevent specialized hardware from taking over. Witness the ASICs for scrypt, Equihash, CryptoNight, ethash, and Cuckatoo. Also, a good PoW should be trivially verifiable and thus hashcash makes a poor memory hard PoW [1]

[1] http://cryptorials.io/beyond-hashcash-proof-work-theres-mini...

> It's fascinating how things just seem to have a way of becoming centralized once enough money is involved, even when engineers thought hard about how to avoid that (see also: the internet).

This phenomenon even has three distinct names: grift, cronyism, and nepotism.

Bitcoin is economics.

Proof-of-Work relies on miners investing and competing. Miners that continually invest generally win - and those that do not, die. The stronger the system, the harder for Bitcoin enemies to subvert/takeover the system.

In 2008, miners used CPU's, several years later miners moved to GPU's, several years later miners moved to ASICs, and recently miners moved to data centers.

> In 2008, miners used CPU's,

Umm. It's not that old, testnet maybe but not the public blockchain.

He did forsee that, if you read his writings.

Its way more fundamental flaw. Production of anything is always more efficient if controlled my a single entity. "Producing" hashes are no exceptions. If "producing" X hashes per second cost Y then "producing" Xk hashes per second wont cost Yk. it costs less because of optimizations.

Yes, but a single entity owning all the hashrate would also significantly decrease the value of Bitcoin, which acts as a balance.

Reality shows otherwise. We don't need one entity to control all the hashrate. One controlling more than 50% is already fatal. Depending on what definition you use we already have that. China as a jurisdiction can be considered one entity. The price may or may not calculate that risk in but no matter how much it would fall it does not turn back time. Remember hashes per second is cheaper to produce when you produce more. That doesn't change if the price drops. The small hash producers are first to become unprofitable and have the smallest reserve's + as soon as they go bankrupt the others are more likely to become profitable regardless of price simply because there is now less competition. If one of the large player would go bankrupt the market would be flooded with cheap ASICs most likely to be bought up by the remaining large players.

If the owner (China) values something else higher, not so much.

Did Satoshi Predict Pooled Mining, Big Farms and ASICs?

https://webonanza.com/2015/10/02/did-satoshi-predict-pooled-...

Bitcoin technology was never decentralized, merely distibuted, despite ideals about how the software could be used.

What is decentralized is the currency at the user level. It has taken the power of control away from a central authority.

I find it bizarre that this comment is upvoted since it's so deeply ignorant of the evidence/history. I'll cite my sources down below but I want to emphasize that I really thought the HackerNews community would be more informed about bitcoin and cryptocurrencies. Maybe this was a false assumption on my part but...it's disappointing nonetheless.

"At that stage, most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated." [1, emphasis added]

"The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms." [2, emphasis added]

To clarify, these are excerpts of satoshi's comment that were in a thread. They've been kept through the Nakamoto Institute website (i.e. my source is a secondary source). I chose this and not the bitcointalk threads because it's Satoshi's writings only.

A few points to note, 'full network nodes' are nodes that do both mining and validating of wallets; not just validating like the Lightning Network or SPV clients. First quote talks about 'like how usenet network has consolidated' which hints at knowing about centralized farming. Second quote is more direct to rebuff the above opinion, fairly directly.

> the biggest thing Satoshi didn't know (or didn't foresee) was that the idea of "one CPU, one vote" was flawed, a victim of its own success, because of mining ASICS.

He knew. In the beginning, it wasn't truly one CPU, one vote. If you had a higher-end single cpu, you definitely got more than one vote since most people don't have the average CPU (it's high-end for a reason). Satoshi clearly had this in mind. Early adopters were awarded more bitcoins with their average CPUs then, than high-end ASICs today. This was all thought out in the economic sense and security sense, attempting to balance both.

>A consequence of that is that bitcoin and related cryptocurrencies really aren't as decentralized as claimed.

I feel this opinion is based on the crypto-twitter opinions. Or based on many 'bitcoin maximalists'. Basically, a narrow-minded group that isn't really seeking to inform the public, they just want to 'moon' and meme.

But looking at this critique from a different perspective, it's extremely decentralized in it's mining function. How many people have mined bitcoins? Throughout time? Has it always been one central authority (Satoshi, Gavin, etc)? Or have people from all stripes been able to? Yes. Many regular working people could buy an ASIC and mine today. That's fairly decentralized, no FED needed to inject a new QE.

Will you make a profit? That's not the question. Decentralization mining exists but at what cost?

I could also unpack the idea that buying coins in 2009 would be considered a decentralization of the currency, since there would be more people (not less/centralized) holding the currency, therefore more dispersed.

But let's return back to Satoshi to conclude. Satoshi thought about CPUs, FPGAs, GPUs, and ASICs. Look at his writings. Look at the OG code. Look at the whitepaper. He created an architecture that creates cryptographic trust through a proof of work function. He knew about Moore's Law and incorporated it. The specifics were quoted above but this conclusion is to bring everything together that bitcoin was thoroughly designed in such a way that thought through ten, twenty years in the future, based on the best science available then. My final thought is that Satoshi 'didn't think about______' is an opinion based on ignorance or it's something outside of the scope of Satoshi's intent with bitcoin. He has many posts that explain enough to settle most debates. Please read more, do less criticizing and when you're informed, let's have a mature discussion.

[1] - https://satoshi.nakamotoinstitute.org/posts/bitcointalk/105/...

[2] - https://satoshi.nakamotoinstitute.org/posts/bitcointalk/287/...

P.S. I'm not a Satoshi worshipper. I've done extensive research and came to my own conclusions. You can debate my auxiliary points but without reading Satoshi's writings, you're missing the context of the actual debate.

So you see Ethereum as a better solution!