🔥 Is Bitcoin decentralized?
Hello!
There is a lot of debate about the decentralization of Bitcoin and cryptocurrencies in general.
One of the main characteristics of cryptocurrencies is their decentralization. It is a very important quality, especially for Bitcoin.
But is Bitcoin really a decentralized cryptocurrency?
First of all we are going to look at the definition of "decentralization", because it seems that this is one of the main factors that lead to erroneous conclusions.
From Wikipedia:
Decentralization or decentralisation is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.
Who are the responsibles to implement the "planning and decision making" for Bitcoin?
Well, if I am not mistaken, the miners have the ultimate power to implement any modification in the protocol. As far as I can tell a limited group of entities control the services, decision making, mining, and the incident resolution processes.
Here the share % of the Bitcoin mining pools:
There is a lot of power in a selected group of entities. There are limitations in the decentralization of Bitcoin.
But there are node operators all over the World, does it make Bitcoin more decentralized right?
Here a cool picture I found on twitter. The data is from August, but must be quite similar.
I think that Bitcoin is quite decentralized, but to achieve a pure decentralized condition is really difficult.
I want to see decentralization in the number of wallets spread around the world. This is another way of seeing decentralization, but in my mind this is really important.
I recently read that attacking the network is getting more expensive as the mining difficulty rises, so I can imagine that in the future this will be even harder.
I believe that any cryptocurrency project is more valuable as more decentralized is. The ability of a single entity to control it is alarming, specially when we talk about governments.
We should get the power back, cryptocurrencies are a blessing.
Enjoy! 😊
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Decentralization is a journey, not a destination.
Bitcoin is a lot more decentralized than it was in the beginning. It all started with one Bitcoin miner, Satoshi. Now there are millions of miners all over the world (including the cloud mining on phones, etc..).
Is there room for things to decentralize further? Certainly.
As for cryptocurrencies, I think the important things is to look at it in totality. While there might be some which are centralized, either via miners or token distribution, we see the collective spread out among tens of millions of people.
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I agree with your point of view. Specially with this:
The most important part is that cryptocurrency is moving to decentralization. The end is not close, but it is reachable.
Cheers!
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Yes and keeping this viewpoint means that it is always on our mind and imperative that we keep pushing in that direction. Everything needs to be done each day to attempt to move in that direction.
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