The Move Towards Decentralization Takes On Many Forms
Regularly we talk about decentralization as a quest for cryptocurrency. There are many layers to this subject, something that is often overlooked.
To start, the primary focus tends to be on token distribution. This makes a lot of sense since an ecosystem where the tokens are spread out tends to be more vibrant than one where the ownership is in the hands of a few. We all know how an economic system shaped liked this works out.
This is especially true in a DPoS system where the token stake also applies to governance. Thus, we see this at the top of the list.
However, that is not the only variable. In a PoW system, obviously mining is equally, if not more important. There is a great deal of concern about 51% attacks, something Ethereum Classic underwent, so having the mining pool spread out also helps to decentralize things.
At the core of this discussion is the ability to totally control a network. As witnessed with Steem, we saw what can occur if one can acquire a large stake for a relatively small amount of money. If a network can be taken over by a few hundred thousand dollars, then it is vulnerable. When it takes tens of millions, this provides some insulation against an external attack.
Therefore, we can add the total market cap to the list of ways to decentralize. If a network gets more costly during the attack, this requires more money coming to the table. As we can guess, a blockchain that is freely traded will fall into this category. What might start out at 25 cents ends up increasing as the buy orders start to come through. Suddenly, the party interesting in taking control is finding the investment requiring 2,3,4 or even 5 times when the process started.
Another mechanism of defense is the wealth of the people who are presently involved on a platform. While an external attack might have large resources, that can often be countered by what is available to those who are already within the system. This is especially true when one is holding an assortment of cryptocurrencies. One bull run can vastly change the fortunes of a large amount of people. Suddenly, a fair percentage of the present user base has access to large sums of money that were not previously available.
Development is also where we can see decentralization taking place. The more applications that are involved in an ecosystem, the less vulnerability it has. If tokenized, this too can serve as a means of generating more wealth for the users while not affecting the base layer. Some of this ultimately could be rolled into the native token, spreading out the token distribution even further.
Having a lot of development, especially within the open source community, means that we will see redundancy in applications. On the surface this might seem counterproductive but it is the exact opposite. When there are multiple user interfaces, the attack vectors decrease. While one site can be taken down, it gets more difficult to go after a dozen, especially if they are spread throughout the world.
The basic infrastructure can also assist in decentralizing a network. When one is expensive to operate, the number of people running the basic infrastructure is limited. However, when we see this reduced, more people have the resources to get involved. Once again, we see the ability to spread things out to a greater degree, seeing more computational power from different entities being provided.
Finally, the governance model of the platform can aid in decentralizing things. By having code in place that cuts off some of the known attack vectors, a system is further insulated against a centralized attack. As time passes, and more is learned, updates to the base code can be added to eliminate the loopholes that are found.
Data security is becoming a larger issue. The recent hack of Twitter only brought the discussion to the forefront again. Quite simply, our data is not secure with the present system. Centralization provides too much risk to be trusted with the valuable information that is being generated.
Thus, our efforts have to be in repeatedly decentralizing our systems and protecting them against centralized attack. This takes on greater meaning than just preventing hacks. Attacks can come in many forms and we must do all we can to reduce, if not eliminate, them.
As we can see, even the best token distribution in the world will be useless if the entire platform is run on one node. The need for control seems to be at the core of this transition. Many refuse to let go of the power they amassed. This is only natural. For this reason, each step in the aforementioned areas needs to keep moving things further away from the centralized model.
The ultimate defense and move into decentralization is the entire cryptocurrency industry. With so many blockchains and tokens associated with them, we are seeing things spread out across the board. While Bitcoin presently has the lion's share of the total market cap, it is not the only game in town. In fact, it is not the only PoW system we see. When we combine all those together, we see many different players from token holders to miners.
This situation only expands as we add in the other types of platforms such as PoS.
Fortunately, much of what is contained here is presently taking place on Hive. This is a blockchain (ecosystem) that is spreading out as time passes. Each day people are working in their own way to further enhance this experience.
Each year brings a noticeable difference on every level.
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