The Land of the Free: Why Decentralization Matters in the Crypto Republic

Every miner has voting rights that are equal to the hashing power and, if a new alternative blockchain is born, the free and democratic rules of the market would determine which is the more successful coin.

In August and October 2017, when people became unsatisfied with the introduction of SegWit on the Bitcoin network, they tried to find a solution to the block's dimensions issue, creating, respectively, Bitcoin Cash and Bitcoin Gold.Voting, pickaxe in handThis dream made of equal rights and free competition is troubled by severe concerns over the actual distribution of mining power that sustains the different blockchains based on proof-of-work.

Its algorithm could do nothing to limit a concentration of power, which is even more accentuated than in Bitcoin's blockchain: Since the summer of 2017, two pools alone - Ethermine and SparkPool - produced over 50% of the new blocks almost continuously every month.

Even if vicious behavior that could undermine the whole crypto economy is rather unlikely in the two leading blockchains, recent events involving the smaller ETC demonstrated that the possibility of a 51% attack is far from theoretical.

Give me liberty or give me scalabilityProof-of-stake could contribute to answering the concerns surrounding the rise in concentration of power within the mining industry and the risk that a malicious super-miner could hijack a whole blockchain.

This consensus algorithm began to work for the first time in Bitshares, the first blockchain project designed between 2014 and 2015 by Daniel Larimer, also the creator of Steemit and EOS. Since then, the crypto community divided itself between those who equate Larimer to Satoshi Nakamoto and those who see DPoS as an unforgivable sin against the very nature of the blockchain.

Since security is a sine qua non for every blockchain and scalability is a goal determining the success of a cryptocurrency, decentralization looks to be the odd one out.

Last May, Neo founder Da Hongfei declared in an interview during Consensus 2019 that the high level of centralization of his blockchain is part of a strategy to compete against Bitcoin and Ethereum, in terms of superior performance.

In the same speech, Ethereum's co-founder stated his support for options he defined as "Good, legitimate ways to make a blockchain fast," without harming decentralization.

With great power comes great responsibilityThe case of Tezos' amendment helps to focalize on the strong similarities between the debate about decentralization in blockchain and some well-established topics in sociology, economics and political science.