Recently there have been a lot of accusations, that because of extreme popularity and spread of bitcoin mining in China “mining centralization” occurs. Experts estimate that around 71% of bitcoins are now mined there. China not only produces most of mining equipments, but also huge mining farms are located there, taking advantage of cheap electricity. China is also a leader in number of mining pools — collaborations between individual miners and mining companies. China is home to four of the five largest Bitcoin mining pools. Before Beijing banned ICOs (Initial Coin Offerings), China accounted for 90% of all bitcoin trade. Having so much mining power centralized in one country put in doubt decentralization of Bitcoin and exposes the Bitcoin network to a worrying degree of political risk.
But…
… despite all the above-mentioned factors, still Bitcoin is decentralized.
The crucial distinction between system of traditional money and cryptocurrency is that if you use crypto, you have the right and possibility not to hand your money to third parties, while in case of fiat you just can’t avoid that. Also if you use fiat money, your life is traced through your bills — whatever you do, you can’t stay unnoticed. Talking about crypto: yes, many people use exchanges and third party services, because it’s easier to manage their digital money that way, but they can deal with their crypto funds directly, keeping anonymity and privacy. While a user of fiat is always forced to use centralized service, Bitcoin user is never forced to do it. They can, for their own convenience, use exchanges or other services — but they are never forced.
System of traditional money is centralized, and the clear proof of it is that only government controls money and has the right to issue it. Try to invent your own money — you will be punished by the law. But nobody can prohibit you from inventing your own digital currency — it will cost as much as people are ready to pay for it, and now we can see the birth of new cryptocurrencies almost every day.
Cryptocurrency removes a whole layer of banking bureaucracy, giving you financial freedom. Even electronic payments can’t give this freedom — PayPal, for example, can freeze your account any time it has any suspicions. Nobody can ever freeze or forbid you access to your Bitcoin wallet. You don’t leave any personal information while using cryptocurrency. You are the only one who has access to your funds.
So, answering the question “Is Bitcoin truly decentralized?”, we will say with absolute certainty: “Yes, it is”.
Topic: Decentralized (Read 102 times)
only because an 'entity' is creating the underlying code for the chain itself, doesn't mean they are in control of it.
the code is only code, which in crypto generally means open source.
in case the code takes a bad turn, the majority of nodes could simply refuse to adopt it,
and/or fork and continue the development in another direction.
but if you mean that initially a new blockchain might not be sufficiently decentralized, then sure that could be the case,
but part of the point is that anyone can spin up a node and join the network.
that's also a reason why there's so many projects mentioning 'masternodes' in the early phase,
for example people have to hold a certain amount of the coin to be eligible to host a masternode,
and in return, they'd receive some type of payment.
(look up Proof of Stake)
you can become a node in the bitcoin network today if you'd like, and help make it more decentralized
but it's much more expensive in comparison to getting in early on something else.
(Proof of Work)
I'm not an expert so I might be wrong!
the code is only code, which in crypto generally means open source.
in case the code takes a bad turn, the majority of nodes could simply refuse to adopt it,
and/or fork and continue the development in another direction.
but if you mean that initially a new blockchain might not be sufficiently decentralized, then sure that could be the case,
but part of the point is that anyone can spin up a node and join the network.
that's also a reason why there's so many projects mentioning 'masternodes' in the early phase,
for example people have to hold a certain amount of the coin to be eligible to host a masternode,
and in return, they'd receive some type of payment.
(look up Proof of Stake)
you can become a node in the bitcoin network today if you'd like, and help make it more decentralized
but it's much more expensive in comparison to getting in early on something else.
(Proof of Work)
I'm not an expert so I might be wrong!
Hi,
I am wondering about altcoins like Ontology.
From their website:
What is Ontology?
Launched by the Chinese company Onchain in 2017, Ontology is a blockchain platform for decentralized trust systems in corporations. It is a giant step toward removing barriers between the blockchain and business sector.
Whenever I read about an entity creating a decentralized blockchain, I wonder what is going to happen if this thing takes off? Isn't the point and excitement around crypto that markets and values of currency are not longer manipulated by companies or governments?
When you are looking to invest in an altcoin, how much does this info factor into your decision?
I am wondering about altcoins like Ontology.
From their website:
What is Ontology?
Launched by the Chinese company Onchain in 2017, Ontology is a blockchain platform for decentralized trust systems in corporations. It is a giant step toward removing barriers between the blockchain and business sector.
Whenever I read about an entity creating a decentralized blockchain, I wonder what is going to happen if this thing takes off? Isn't the point and excitement around crypto that markets and values of currency are not longer manipulated by companies or governments?
When you are looking to invest in an altcoin, how much does this info factor into your decision?
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