The litmus test for decentralization of a cryptocurrency is the government "asking" to add transaction filtering policies to the protocol. Then we shall see who is true, and who's been swimming naked.
I think we will see centralization effects much earlier in terms of monopolization of profits. Well we already have with the Chinese mining cartel preventing even an increase to 2MB blocks, ostensibly so they can increase transaction fees. We have already seen it over at Bitshares with the bidding out a Cryptonote clone implementation financed by a private investor who can then set and earn transaction fees for the (optional) anonymity feature.
What this all seems to indicate is that there is no such thing as decentralization and commerce is always a winner-take-all paradigm of the natural power-law distribution of wealth and the Iron Law of Political Economics.
Fuck our idealism right? As long as we can earn a buck while Rome burns, that is just natural?
Personally I am not a believer that we can't change the fundamental forces of nature.
Look around and notice the phenomena in nature which remain decentralized, such as reproduction. Why? Because such phenomenon only require local partial orders. Global consensus is a global partial order (meaning an arbitrary choice of a combinatorial expansion of potential global orderings).
However we have one model of global agreement which has a stable equilibrium in terms of game theory strategies. That is the Nash equilibrium, which basically says that the optimum strategy is known and thus we can then compute from that stable strategy the economics and relevant outcomes of the system. With Bitcoin, the Nash equilibrium doesn't fail due to selfish-mining because none of the miners have more optimum strategy to pursue than normal mining for those with < 25% of the hashrate and selfish-mining for those with > 25% of the hashrate. So the Nash equilibrium doesn't prevent devolution into centralization, rather it only guarantees that the optimum strategy is known.
In terms of avoiding centralization of global consensus it is really about destroying economies-of-scale. We have an example for this on the internet. It is the End-to-End Principle, which basically says that the network where the economies-of-scale are applied should be fungible and substitutable and thus all the smarts and control lies at the ends of the network. Thus the ends can be diverse and leverage economies-of-scale without being captured by the economies-of-scale.[1]
That is my design to fix crypto currency. Someone has named it "savoircoin".
Note Iota is an attempt at a similar goal, but the Nash equilibrium doesn't exist for the ends (or at least it hasn't been proven that their optimal strategy is known) and thus I allege it devolves to non-consensus without centralization.
| [1] | Cryptonote and Z(ero)cash are end-to-end principle anonymity systems, because the anonymous constructions are created by the ends autonomously without involving a network of masternodes. This is why Dash and Vcash's Chainblender suck. Note however that none of these coins have made mining and validation stable end-to-end principled. |
In order to beat Bitcoin, you much provide something that Bitcoin can't do which is more popular and has greater network effects.
Bitcoin for the moment owns the store-of-value and slow-large medium-of-exchange functions of crypto currency, and that is unlikely to change unless Bitcoin so screws up the block size issue that the market is forced to choose a new block chain for these properties of money.
However, the instant-micro medium-of-exchange function of crypto currency is still wide open. Ditto on chain privacy and anonymity, which appears to be a two horse race between Monero and Z(ero)cash, but I have my doubts as to how popular/practical overt privacy and anonymity will be. Bitcoin is hoping for Lightning Networks (<-- click the Reddit link at the linked post) but LN requires large block sizes for garbage collections spikes and it realistically can't allow anyone to pay anyone, plus it is a centralization paradigm to be owned by large corporate servers. V(anilla)Cash is pitching some insecure Zero Time shit that can't scale. Bitshares and Dash are pitching some more flawed shit, and even I discovered that InstantX's white paper had a high school level math error in its security calculation which made it seem much more secure than it is.
Ethereum has no users, no chance of scaling decentralized, and no one has even shown that any Dapps are important and/or can't be done in another way. I pointed out the prior day that Augur is insecure.
Market cap is irrelevant if it is not sustained, because P&Ds are easy for whales to conduct by buying from themselves, including constructing fake buy walls.
So yes I think Bitcoin can be beat. But it won't be easy. And the chances are slim. You actually have to have a plan for stimulating instant microtransactions medium-of-exchange adoption. It won't just happen by magic and you won't be able to just employ the mass media to dazzle the gullible tinfoil speculator junkies for the userbase since Bitcoin already captured them.
Bitcoin for the moment owns the store-of-value and slow-large medium-of-exchange functions of crypto currency, and that is unlikely to change unless Bitcoin so screws up the block size issue that the market is forced to choose a new block chain for these properties of money.
However, the instant-micro medium-of-exchange function of crypto currency is still wide open. Ditto on chain privacy and anonymity, which appears to be a two horse race between Monero and Z(ero)cash, but I have my doubts as to how popular/practical overt privacy and anonymity will be. Bitcoin is hoping for Lightning Networks (<-- click the Reddit link at the linked post) but LN requires large block sizes for garbage collections spikes and it realistically can't allow anyone to pay anyone, plus it is a centralization paradigm to be owned by large corporate servers. V(anilla)Cash is pitching some insecure Zero Time shit that can't scale. Bitshares and Dash are pitching some more flawed shit, and even I discovered that InstantX's white paper had a high school level math error in its security calculation which made it seem much more secure than it is.
Ethereum has no users, no chance of scaling decentralized, and no one has even shown that any Dapps are important and/or can't be done in another way. I pointed out the prior day that Augur is insecure.
Market cap is irrelevant if it is not sustained, because P&Ds are easy for whales to conduct by buying from themselves, including constructing fake buy walls.
So yes I think Bitcoin can be beat. But it won't be easy. And the chances are slim. You actually have to have a plan for stimulating instant microtransactions medium-of-exchange adoption. It won't just happen by magic and you won't be able to just employ the mass media to dazzle the gullible tinfoil speculator junkies for the userbase since Bitcoin already captured them.
