my previous article I’ve written about factors that could possible
affect decentralization of a public blockchain. And if you start
applying them to existing blockchains, it becomes clear that most of
blockchains are guilty of one or two of such factors.
much easier to sell centralization disguised as decentralization, and
is very profitable. It seems that nobody cares about decentralization
anymore. Maybe decentralization doesn’t even matter?
What is the problem?
is the problem with centralization? It’s obvious that a Central Point
is a Point of Failure, but what kind of failure in this case?
central point can be used to get some advantage. Control of a public
blockchain is a power, which governments, big corporations and criminals
want to control. Humans are weak point, they are especially exposed if
they are part of that central point. Not necessary to destroy, but force
them to do what powerful actor wants.
Most people think it’s impossible to force any changes, “because it’s Open Source”. Unfortunately not every problem is easy to notice, otherwise we wouldn’t have software bugs. Some backdoors can intentionally be planted in a code and pass all verifications, only authors would know how to use them. There are many examples of that.
Last week at the Financial Cryptography conference
I made a presentation about a role of decentralization for a public
blockchain. Now I want to describe better my thoughts and position. I’m
going to make few blog posts about it, this one is the first in the
we will come to a decentralization metric from 0 to 100%, where 100% is
fully decentralized blockchain. I believe that the average value for
the top 10 blockchains will be less than 50%, likely less than 25%.
in the top 10 don’t even try to be decentralized. A centralized
blockchain is a current trend, it is more effective for the most of the
use cases and easier to compete in marketing, so most of the current
blockchains are fine with being centralized.
we speak only about the protocol, a peer-to-peer network, in most of
the cases we have a decentralized network. That’s where people usually
stop thinking about decentralization.
Some time ago I deployed a token contract called BitEther Coin (BEC). The idea is simple — an ETC miner participating in this experiment is getting an additional BitEther token reward to Ether reward received from a block. The Miner gets both Ether (5 ETC per block) and BitEther (2 BEC per block).
This is not a modification of the protocol, nor is it a hard fork or soft fork. It is just a standard feature provided by the existing technology and capability of the ETC system.
By doing this I am trying to show that Ethereum Classic is not the same chain as others: it has more powerful technology which allows you to build your own blockchain layer on top of it. Security of the network can be supported by any participant or by any business building on top of the chain.
BitEther Supply Model
The BitEther Token follows the Monetary Supply of Bitcoin. My initial goal was to make it issue 50 tokens every 10 minutes, with a halving every 4 years.
In practice, BitEther «big block» time is less that 10 minutes, because an additional goal was to reach 99% of total token production at about same time as Bitcoin will. As a result, BitEther issues 50 BEC coins every 6–7 minutes, and halves every 3 years.