TD₿: Measuring Decentralization by Paul Sztorc
TL;DR When you boil it all the way down, decentralization comes down to how cheap it is to run a full node.
Hey Bitcoiners,
Many other cryptocurrencies besides Bitcoin falsely advertise that they are decentralized.
Exhibit A from the Solana website:
In reality, Solana has suffered several instances in the past year where its blockchain has gone offline for hours on end and then had to be rebooted by its centralized team. (sounds super decentralized!)
Decentralization is something that only becomes evident in periods of emergency. The decentralization theater of “cryptos” is always exposed in an adversarial environment where their centralized teams have to unilaterally act to save their protocol.
The fact is, decentralization is something that is difficult to measure and define so it’s difficult to disprove. That is why these other “cryptos” can get away with calling themselves decentralized when they are anything but.
In a lot of ways, the proof is in the pudding when it comes to measuring decentralization. Bitcoin has remained highly resistant to change for its entire lifetime — a sign it is truly decentralization. Another way to measure decentralization is how cheap and easy it is for regular users to run a full node.
Paul Sztorc describes how the cost of a full node is the only real way to measure decentralization in this excellent blog post (09/09/2015).
Decentralization is not a spectrum — a cryptocurrency is either sufficiently decentralized or it isn’t.
Only Bitcoin has the track record and the inexpensive nodes to call itself decentralized today.
Tick tock next block,
Cory Klippsten
PS - Do you want to run a full Bitcoin node? Check out umbrel.
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Quote of the Day
“Most 'altcoins' claw back bitcoin's decentralization, reliability & security to add more features, and then advertise this to investors as innovation.” - Lyn Alden, Founder and Investment Strategist at Lyn Alden Investment Strategy
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