Aspects of Decentralization: Reality Meets Imagination
“Something of which everyone is aware, but no-one likes to discuss!”
The matter of decentralization is a particularly interesting topic as there are several different views from which the issue can be approached. Often, we come across very different beliefs that are worth discussing as distinct standpoints tend to help understand problems more thoroughly. The standpoint that the ILCoin Development Team represents is unambiguous, and is supported and proven by the developmental approach that characterizes the ILCoin Project.
The current perception of decentralization is quite utopian in many regards. Just as not everyone has the opportunity to exercise the same rights in a democracy, it is also impossible to provide equality to everyone in the world of decentralization. Perhaps this equality isn’t even needed, but people still believe in it since they think there is no central power in such a system. Is there, indeed, a central power?
The currently known decentralized systems such as Bitcoin, Ethereum, and hundreds of similar systems are not decentralized the way most people think. Of course, we are not saying this is deficient, but we attempt to approach the issue from a perspective that perceives reality from the right direction, and therefore, urges people to draw different conclusions. Instead of looking at the subject from a superficial ideological viewpoint, we are analysing the question with rationality on the grounds of logical considerations.
When discussing the matter of decentralization, it must be clarified that we are either talking about the free running of the nodes (where every transaction is transparent) or about free block generation. This is the reason we believe that decentralization is a practical issue, not an ideological one. In contrast to what most believe mining systems look like, their build-up is entirely different in reality. To be competitive in Bitcoin mining, significant investment is needed. However, this is only the smaller portion of the problem. A group created by the majority of the miners has the power to have full control over the whole system. By sharing our thoughts, we are not intent on critiquing Bitcoin mining, but rather wish to draw people’s attention to the possibility that the reality of decentralization may be far more different than what they had previously believed.
Bitcoin’s current system also has the potential to create internal, central power. What do we base this statement on? After the most recent hacking attack on Binance, rolling back the blockchain emerged as a possibility. This statement, in itself, has triggered serious resentment in people as it may prove our theory and claims regarding central power. Therefore, if it does turn out to be the case, it brings up major trust issues concerning Bitcoin. Fortunately, it has not happened yet. So, everyone that believes in decentralization as the basis of equality will continue to sleep comfortably.
https://www.coindesk.com/binance-may-consider-bitcoin-rollback-following-40-million-hack
A rollback of the blockchain raises serious moral issues because any action favouring someone can only be done at the expense of another. With that said, and internal power is at least as much of a threat as an external 51% attack. In this case, trust is of the same importance as in a system that openly admits to representing a centralized approach. Consequently, in the case of Bitcoin, the “trust-less system” might be even more significant! Most people would rather put their trust in a system where the truth remains untold than in one where things are crystal clear. Sadly enough, it is a powerful element of human nature; the appearance of democracy is somehow more imporant than democracy itself.
We would like to make it clear that we are not against Bitcoin or Ethereum systems in any way. We only attempt to shed light on certain aspects that might be worth paying attention to in the long run. Of course, the whole situation becomes quite complicated as miners are being operated by people. PoS systems could also be characterized by the same criticism since the possession of master nodes could have the same sort of advantage as the exploit of having the majority of miners.
In the case of Ethereum, we can provide an actual example where miners were abused, and the blockchain was rolled back to place some people’s interest ahead of others. Unfortunately, DAO did what Binance was merely considering. The case happened on June 17, 2016. An attack against the Ethereum network resulted in the rollback of the blockchain. Needless to say, it was done in the name of “doing good”. Or was it? From a practical viewpoint, how much harm must have been done to those who suffered losses of millions of dollars through this action of good intentions? How could this possibly happen in a decentralized system? Does the main problem lie in the perception of the concept as a whole? Most people perceive decentralization as an idea where the possibility of exercising central power is non-existent. However, this cannot be further from the truth. In reality, establishing a central power is only a matter of internal agreement.
Source from: https://www.etherchain.org/charts/topMiners
Is what we consider decentralized just a utopian ideology similar to democracy? I suggest that everyone answer this question for themselves. However, one thing is certain. In any system that is being controlled by people, there is a possibility that the majority will act at the expense of the minority. Therefore, the decentralization of different consensuses — such as PoW and PoS — is only an open system in that it allows anyone to freely join if certain conditions are being met.
What can be the solution to the problem? The philosophy that the ILCoin Development Team follows is in many ways different from the general approaches that we come across on the blockchain and cryptocurrency market. Instead of superficial ideological values, we are seeking real, practical solutions. Decentralized mining will only take place if we create an internal boundary for participants in the system which ensures the practice of central dominance.
Before we get accused of being naive, we would like to clarify that we do not consider it realistic to realize fully decentralized mining, since the human factor will never be completely eliminated from the equation. However, we do believe that the current system has room for improvement, and we should seek after an environment where it is more difficult to exercise central power.
This approach works as a syndicate that defines rights; not based on hash power, but on the number of participants. Obviously, this sort of consensus could harm the interests of those who pay respect to the possibility of the creation of central dominance. However, one thing’s for sure: decentralization will only be achieved if hash power, as a tool for exerting power, gets controlled and limited. C2P — a development of the ILCoin Development Team — is here to help exclude the possibility of abusing hash power. Hence, the system is quantum-resistant. In ILCoin mining, block generation is not based on the strength of hash power. Valid blocks are created based on the digital signature of admiral nodes.
With this system in mind, we started preparatory work on developing C3P. It will be a technological solution that can eliminate different types of abuse in any system; including the types of Bitcoin and Ethereum. However, the situation is not that simple and straightforward. As C2P protects the system from external attacks, C3P meanwhile protects the blockchain system from internal attacks. We might begin to think, “How come there is a need to protect a system from those who operate it?” Well, we have a simple answer for this: the system is for the user. So, the interests of each user should be the same. With that said, the measurement of power should not be based on the amount of hash power one possesses, but on the fact that the value of the network is more important than the interest of any given group. This approach is much closer to decentralization than the currently known and accepted one.
