The Grind For Decentralization
I've heard many scoff at the CEOs and dev teams of a token who premine their project and then say:
Don't worry, we'll decentralize later.
While this is a highly laughable statement in many contexts, it's also the only way for legitimate projects to become decentralized. Not a single crypto network in history has started out decentralized. Even Bitcoin's first million coins were premined by Satoshi Nakamoto. In fact, most assume that if Satoshi moves any of his coins in any of his wallets, Bitcoin will instantly crash 90% or more.
How is that decentralized?
How can Bitcoin be decentralized if everyone is worried about the founder dumping their tokens? That's a literal definition "not decentralized". That is the main way that distributions and premines are an ever-looming threat hanging over the network.
The interesting thing about Hive is that we don't have this fear. Sure, there are huge whales on Hive that own over 1% of all tokens in circulation, but we've already been through the gutter. We already know what it's like when giga-whales looking to exit can crash the price to 10 cents and keep it there even as Bitcoin is going x4.
In this regard Hive seems to be even more decentralized than Bitcoin... which is a weird thing to say, and might not even be true given the fact that whales can control multiple accounts, but still... it MIGHT be true, which is crazy that it's even possible. In fact, it's true either way; the only question or not is whether this belief is actually justified and accurate. Hive does not fear a dump by the founder or any of the other whales. This is not the case for every other crypto I know of, most of all Bitcoin.
And while we are on the topic of Hive, the upvote/downvote mechanics allow us to be more decentralized much more quickly than something like Bitcoin. How does Bitcoin gain decentralization? People have to buy it on a centralized exchange... how ironic. Isn't that weird? This is literally the only way for Bitcoin to decentralize given a mainstream adoption era. Decentralized exchanges won't be useable for mass consumption until like a decade after that.
Speaking of decentralized exchanges...
None of them are even decentralized. The only decentralized exchange I actually know of is ThorChain/RUNE. That is all. Everything else is littered with centralized bottlenecks and wrapped tokens that are minted in centralized ways.
Something like Uniswap is only decentralized if the tokens being traded exist entirely on ETH. Same is true with Pancakeswap: only decentralized if tokens are on BSC. Ditto Sushiswap; Polygon. And even in that case, the tokens themselves have been programmed in a centralized way. Show me a single DEFI project on EVM where the dev team doesn't have complete unilateral control of the project. These EVM chains masquerading as layer two are a bit ridiculous. Ironically they would probably be even more decentralized if they were layer twos instead of layer one clones. Weird
But it's all a process.
See title: this is the ultimate grind. There are no shortcuts. Decentralization takes, not only a lot of effort, but a lot of time as well. The process is baked into the cake.
A lot of these VCs and corporations think they can just buy decentralization. They think they can buy an excited community that wants to work for them... for free... and they just get free money. How ridiculous is that? For those of us that lived through the hostile takeover, we know that's not how it works. Imperialism on the blockchain only works with consent. Actually that's how it works in the real world as well, which is why billions of dollars are spent trying to turn people against each other and spread rampant misinformation and other forms of propaganda. Citizens that consent to the system are much more profitable than those who aren't. This is why I have never and will never vote within the legacy system.
Betting back on topic.
When someone worries that some up-and-coming social media WEB3 crypto is going to pop out of nowhere and surpass us? Yeah, ridiculous. It's not possible. Not only that, if it happened it would benefit us, as we could copy their template within the open-source atmosphere. If it's not open source... then it's not WEB3 and we don't even have to worry about it. See how that works? Hive has a sweet niche, and much like Bitcoin has the monopoly on security, so to does Hive have has various niche monopolies.
Normally when we think of a "monopoly" or "corning the market" this would be an extremely bad thing. In crypto, not so much. There's no need to invent the wheel. We are creating fair systems that become a monopoly for a reason. If the system we build isn't fair someone will just rebuild a better version and take that functionality away from us. It's the ultimate healthy version of competition.
There are a lot of things that Hive can do, and it's unclear how are niche is going to solidify. There are a lot of moving parts and nothing is set in stone yet. For example, Hive could become a gaming network given the right game developer eating up all Hive's resources. Hell, Hive could become a porn network. Luckily video can't be stored directly on chain so the vast majority of that would be on another layer 2 solution. But imagine if that layer two had 100M users. Even though Hive only stores text... 100M accounts all casting upvotes is more than enough to dominate all our bandwidth. Again, it's unclear how this is going to play out. There are a lot of niches out there that need to be filled.
This is yet another reason why I'm not convinced that EVM tech is going to be very successful. If the point of crypto is for everyone to pick a niche and be good at a small subset of activity, then general purpose blockchains like ETH, BSC, and Polygon are certainly going to fall by the wayside. Trying to do everything on one inefficient network is not a very good strategy. We need to divide the workload.
However, there are certain niche functions even inside general purpose blockchain. For example, as already stated, atomic swaps become trivially easy to implement and the liquidity pools between all the tokens built on the layer one becomes an exponential advantage. In this respect EVM chains may become the testnet incubators used for new projects. The tokens that succeed and need to scale up will move off chain and likely create their own chain (or move to a layer 2 solution... which is almost the same thing).
Conclusion
All competition in crypto is healthy competition. The open source solutions that outperform the current paradigm can only benefit the cryptosphere as a whole. Unlike the corporate world, it's not possible for some rich guy to move in and scoop up the entire market with deep pockets. That's not how it works. That's not how community works, and it's not how sovereignty, trust, or freedom works, which are the foundations of crypto.
Decentralization takes time, a lot of time. Some of these centralized networks will be able to pull it off, and some will not. The safest bet is to just jump into the networks that already have a decent level of decentralization with a history of acquiring more over time. Certainly not the most profitable bet, but in a market this volatile and valuable, increasing risk is often a fool's errand. Keep grinding.
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Monster post bro! People really need to understand that decentralization is a spectrum, and HIVE is just as far, if not further, than Bitcoin on that spectrum. Some of us on HIVE get impatient with the growth here but that’s a product of true decentralization…hell, it damn near took Bitcoin a decade to boom
Is it possible to use hive.fund stake as liquidity for AMM on hive chain?
Just imagine the level of liquidity and fee can help to grow fund as well.
I'm gathering knowlege of crypto gradually.Today your article have added a little more of it.I don't know if hive is totally decentralised but it is good to know that hive is the best among all.So that's enough for the people to embrace it.This crypto thing was totally unknown to me before coming here. I just knew about bitcoin😂.Not only me but there are people also whom I wanted to explain hive and in that context the word 'bitcoin' comes and his knowledge about bitcoin was''bitcoin is a platform where people can buy or sell old coins.(LOL) I tried not to Lough.But people are gradually joining this revolution and they need a faithful platform.
For now I'm concentrating on learning.Then will try impressing people as I know the more people joins hive, the more staking comes into action and thus hive can entirely be decentralised it near future.
Ocean comprises of millions of small drop of H2O.Today your post adds a few drops of knowledge to my stream of knowledge.It will surely be a giant ocean soon as long as articles like yours keep popping from veteran like you.
!LIV
They say Cardano is the most decentralized blockchain network. But that would just prove that decentralization without use cases is futile.
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"They" meaning Cardano stakeholders.
And Cardano stakeholders are not decentralized.
The distribution itself is inherently centralized.
How does one get Cardano other than buying it from an exchange?
No different than Bitcoin or all the rest.
You can actually work for money on Hive.
We need a lot more infrastructure but we are way ahead of the pack.
Mind-blown! I know this is off topic, but I just need to say that this is one of the reasons why Hive is so much different and unique compared to other social media. You never get to learn about things like this. You've helped me understand what decentralization is and what centralization disguised as decentralization is. And from this post, I have learned that eventually, the test of time will prove what true decentralization actually means. Hive will eventually shine through as a truly decentralized network. In the meantime, we will keep grinding and building.
Hmmmmmm... some thoughts right here
This makes sense but I dont really think it's a weird thing to say except if the success of a crypto is based on how decentralized a token is.
This sounds scary
Well, thinking of it now, it sounds weird.
This is one reason why I decided to back out of defi. I feel it is too new to thread on and will come with a lo of losses in the starting time .
Well, a lot has been said but there are a few things I can point to
In all, do proper risk management with your funds. This post just shows how much you understand the cryptosphere
It doesn't feel possible except ofcourse hive stops developing but that is so unlikely.
Guess what. Everybody will pay their fair share of “tuition” in getting how DeFi works, whether now or in the future when it is no longer “too new”.
Your breakfast dey wait you. 🥗🍲🍜
I have been served enough sir except you are wishing me more.
The defi space is mad.. Too mad for my personality
Lol no o, you’re no longer a newbie then, tuition is for newbies.
Yeah it’s mad, very mad, very mad lol. But normal is boring 😂
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But the big boys say making it is also boring cos doing something consistently for the long term is boring.
I don wash hand from una defi.
The one wey I still get go remain for there..
Decentralization is a power play and it has the most pullback from all technologies that have been invented and developed so far. We are not talking about years, but decades until it will be vastly adopted and reshape the world order if that is even possible.
We'll just need to play our role in it and get involved instead of letting just others take the power and pull the strings as usual.
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we overestimate what we can do in a year and underestimate what we can do in 10 years.
in ten years crypto is going to be insane.
Decentralization truly takes alot of time and before hive can be fully decentralized it will take time but hive is better than most mainstream project when it comes to decentralization
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This line of thought is so hard for those with mainstream businesses educations to wrap their head around.
Totally correct though!
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Very interesting, the part of a web3 social media taking hive is not foreseeable, hive is just so a close niche that remains open to everyone and anyone. Open source code makes Decentralization even more possible. Thanks for enlightenment...
The Bitcoiners will definitely have you on their hit list after this post. Ha Ha Ha
It's amazing how closed minded the supposedly open minded can be.. You speak sacriledge. LOL
I remember you writing about decentralization and Hive, your never afraid to discuss things which are controversial or sensitive. Thats what this movement is suppose to be about!
bravo.
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PolyCub
We are marching towards decentralization here, and like many projects we need to mature, but we are heading in the right direction.
#Polycub DAO style voting is a start
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IIRC, IRC is also text only, but means of using text to encode video arose back on Usenet (also text only, if I'm not wrong), and IRC and Usenet both have long been used to share all kinds of media, so it seems to me Hive could be used the same way.
Just sayin'.
But that's besides the point, which you make well.
Thanks!
i had been saying that to the bitcoiners for years. Satoshi could wake up any moment and dump every single one of his coins.. Are people that retarded?
When i say bitcoin myk is the most decentralized crypto in history people are too dumb to understand that the entire bitcoin myk model is geared to the best widespread distribution that's what decentralizes your network.
What difference does it make to say you're decentralized if through governance tokens you can control everything by your token supply.. or you just own so much of the coins you can crash everyones investment. i always say crypto is a group of the smartest dumbest people in history. it really is. And watch they just ignore everything i said and go right back on the bullshit lol
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The fact is that should all bitcoin be dumped, wouldn't that in it of itself, strengthen bitcoin, and considering that 1 million bitcoin entered circulation, that would hardly crash the price more than making some bigger whales and many more into whales?
Very well stated. I had not considered that bitcoin didn't start out as decentralized. But you're right. Satoshi did mine the first bitcoins. Until another node entered the scene, it was completely centralized. Beginning with decentralization isn't possible. Someone has to kick start the project.
Yeah there’s definitely challenges with going decentralized in the first place. You likely won’t be successful immediately decentralizing everything which is both good and bad. Take Splinterlands. If they immediately opened and decentralized everything we wouldn’t be where we’re at today I don’t think. It’s certainly a challenge but it’s a road we need to undergo initially to have true decentralization later. Validator licenses, SPS and some of the other mechanisms are going to help get it to where it’s roadmapped to be.
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So many people in history have thought buying and selling communities was a good idea. It isn't. People just don't think that way. Look at Twitter - a new owner affects how many individuals view the platform.
After using a ton of EVM chains and thinking about where it is all going I have to say that I came to the exact same conclusions. Decentralization will become important one day and no one is ready for it except Hive. I'm just glad I have someone else's thoughts on the same subject to compare them to. Great post!
Btw, do you see a future where Thorchain gets everything right, and then someone comes along, forks their code, and deploys a tokenless DEX where no one has access to the keys, code, or anything else? I really feel that this is the only reasonable way to create an unbiased DEX. No governance, no community, no token, just plain code that works and can't be penetrated.
Ofc we would need hard proof that the creator destroyed all access to the code itself but I'm sure that will be possible if/when the time comes.
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Tokens are used to secure the network. Node operators have more to loose if the network breaks due to their bonding requirements to run a node. Nodes are needed so that the network can have true decentralization, node operators have to be incentivized to run nodes because the platform has to be powered somehow and sign transactions.
It will be interesting to see how what you’ve described will be feasible
Why do you feel Thorchain is not unbiased?
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Yes, networks need to be secured by nodes and validators but exchanges don't. A simple token swap with a deposit/withdraw function that has theoretically unbreakable code does not need validators to exist, it needs a secure network to exist on.
I do not think Thorchain is unbiased, I think that every community and every project has a set of biases that are mostly positive but sometimes they can fuck things up.
Thorchain specifically has a bias towards a multichain world where atomic swaps are the standard and I love that idea but... The fact that a token exists implies that the token holders will always want to extract as much value as possible meaning that Thorchain will need to continue to grow and probably offer a lot more services than simple swaps.
For blockchains and communities like Hive this is a great thing but for something simple as a token swap this can lead to overcomplication of the product itself which may or may not impact the adoption of said product.
I'm not saying this is going to happen, just saying that is a possibility when greed starts driving innovation.
Maybe I'm overthinking it but the same thing happened to medical research and now we only develop cures that bring the most money in, not the ones that should be a moral priority.
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Your idea is very interesting and your reasons are valid, but the reality of it beats the internet of my mind especially given the capabilities of the present innovation.
You ser must be from some very distant future lol
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