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How to realize the decentralization of blockchain (I)

Time : 27/04/2022 Author : hr0pez Click : + -
        Speaking of decentralization, we have to trace back to the origin, starting with the bitcoin network. The bitcoin network designed by Satoshi Nakamoto is to realize point-to-point transactions, so as to ensure the security and effectiveness of transactions without the help of third-party authoritative centers such as banks, securities institutions and the national government. The verification of algorithms and nodes in the bitcoin network proves that every token you send has not been used in other places, that is, there is no double payment, thus eliminating the endorsement and supervision of the authority. In short, the bitcoin network uses mathematical algorithms and encryption proofs to replace the artificial "trust mechanism". However, how is the decentralization of the bitcoin network realized? Does a technology directly bring about the effect of decentralization? Let's take a look at the technologies used in the bitcoin network: hash operation, Merkel tree data structure, asymmetric encryption, timestamp, and distributed ledger.
 
        These technologies already exist and have been used in different places. However, we can not say that these technologies have directly brought about the effect of decentralization. Perhaps the most easily confused one is "distributed ledger", which means that data is stored in different places, and each node has a copy. Once a new consensus is reached, all nodes can be upgraded to the new consensus. This is one of the key technologies of the blockchain. Therefore, a blockchain must be distributed. However, distributed ledger is not necessarily decentralized. Distributed ledger can be authorized or not. In a word, the technology adopted by the blockchain cannot naturally bring about decentralization.
 
        We need to rethink what centralization means. Some people may intuitively think that decentralization means that there is no central authority or central control. Yes, this is a form of decentralization and the decentralization of power. In addition, there are many other kinds of decentralization in human society. In fact, the form of decentralization exists widely in human politics, economy and interpersonal relations. For example, the decentralization of geographical location (the location of nodes), the decentralization of network architecture, the decentralization of logic, and the decentralization of control rights. The decentralization of the bitcoin network actually refers to the decentralization of control rights, that is, up to now, no one / machine / node can control the bitcoin network.
 
        The bitcoin network is also decentralized in terms of geographical location and network architecture. However, I think it is not a logical decentralization. In fact, all nodes joining bitcoin need to recognize the same algorithm, that is, the so-called "consensus", and verify according to this consensus. If some people think that the current setting is unreasonable, for example, if they want to improve the trading efficiency, they can only go to the hard fork, which is what actually happens. However, at the beginning of the creation of the bitcoin network, when there was only one node, can we say that it was decentralized?. The reason why the bitcoin network can be decentralized is not realized by "technology", but by "incentive".
 
        Economic incentives rely on technology. However, if appropriate incentives are not designed at the beginning, more people cannot be encouraged to participate according to the rules, and there is no certain mass base, there will be no way to achieve the so-called "decentralization". The decentralized network of bitcoin relies on the participation of many miners, who pay power and computing power to verify the authenticity of each transaction and achieve fairness without central authority. Just imagine, if there are not enough miners, there is only one miner in the network, and every transaction is verified by him. Even if this miner is diligent and does not fake, it can not be said to be decentralized. A successful blockchain project must have sufficient economic incentive settings, a deep understanding of human nature, and a grasp of the essence of game theory. Only in this way can dynamic balance and trust be realized, thus eliminating the need for a third-party centralized arbitration institution.
 
        The setting of economic incentives is inseparable from the use of original tokens or cryptocurrencies on the chain. In other words, it is basically impossible to achieve Decentralization for blockchain projects that only talk about blockchain technology without talking about economic incentives. When judging a blockchain project, we should also pay attention to their economic incentive settings, whether they have left a large number of tokens for their own team, who are the participants, and what the share of early investors is. After a little calculation, we can judge whether a blockchain project that truly encourages public participation and is fair and just. At present, it is difficult to say that many blockchain projects in the market have truly realized decentralization, especially the equity proof blockchain. Many times, a large number of tokens / wealth are actually in the hands of a small number of people. For example, in the high-profile cosmos project, 1 / 3 of its original tokens are held by the first 6 verifiers, and the first 21 verifiers hold 2 / 3 of the tokens. According to relevant calculations, The decentralization index of cosmos is only 0.25 (0-1 score, 1 is complete decentralization).
 
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