Topic: Emphasis of true decentralization on bitcoin (Read 173 times)

I'm not an expert,but here are my two cents.To me,the real disadvantages of decentralization are:
1.Costs of implementation- Decentralized systems/networks can be more expensive to implement,compared to centralized systems.
2.Speed and efficiency.-Sometimes,decentralized systems/networks can be slower and not so effective,compared to centralized systems.
There disadvantages of hacks and fraud,that you mentioned aren't related to decentralized networks only,even though I think that decentralized systems are a little bit more secure than the centralized systems.

The decentralization of bitcoin is in the area of the inability for the usage to be controlled or not to be controlled which is usually by the people in government. Decentralization makes it difficult to like withdraw or order for a return of mis-sent fund like in fiat. With fiat it is easy to do that but with bitcoin, it can only be traced to the wallet I think so.

If you are talking about crypto exchanges and some custodial wallets then you are right Bitcoin is vulnerable but it's not Bitcoin's fault but the vulnerability and security flaws those third party services are offering. But if you are talking about the existence of double spending or a 51% attack I believe that these two are something cannot be done in a large scale or can be greatly mitigated by waiting for 6 confirmations in your transaction, basically the hashing power of the pools we have now are too big and I don't think a certain individual has a lot of resources to overpower Bitcoin's network.



We already know that Bitcoin isn't anonymous as what was previously said to it.


Both people within the government as well as the ones doing criminal activities know that Bitcoin is traceable through Blockchain and other methods of tracking that's why they criminals are shifting to a more privacy oriented crypto such as Monero. Your two "disadvantages" seems to me are non-existent and is something disproven for a long time now.

We do not like bitcoin because it is perfect, there are many things wrong about bitcoin as well that could be solved and all that. No we like bitcoin only because the reality is bitcoin is something that is rare and that decentralization makes sure that there are nobody else that could decide about the economy but you. Remember segwit period?

There was a team that was so rich that they could literally control the whole bitcoin mining world and they were almost as powerful as any other financial family in the real world for bitcoin world, but they couldn't change anything, they had to fork bitcoin and make their own coin because they couldn't control bitcoin and couldn't stop it going to segwit route. That is the powerful side of bitcoin, no one person has power over bitcoin, not even bunch of super powerful people have that.

Here's the thing about the fraud activities caused by it being decentralized. There are always pros and cons about something and no matter what, you can't remove that. BTC ain't perfect, we all know that, BUT, we all like it. We all use it, acknowledge it, and want it to be adopted. You can't just put it out as a disadvantage when it could also be said as an advantage, that's just stupid imo. Besides, the ones most at fault with fraud activities are the ones being scammed, the system of BTC totally has nothing to do with it. Hacking, yea you can put it that way. But let's be honest, there ain't a system that is perfect. Everything and anything can be hacked, it's all a matter of that hacker wanting to get caught or not since that increases the difficulty in of itself already.

Hacking and decentralization have absolutely nothing in common at all. Hackers could hack anywhere, they are hacking websites and getting the money out of there, they are not hacking peoples wallets. I mean could they?

Probably, if they put a keylogger to your website and hack you that way, they could potentially do it however one thing for sure is the fact that they can't hack blockchain with brute force, that requires way too much power that I doubt anyone would have. That is the scare about the quantum computers, because if that can be done and computers become like a million times better, that means they could make it easy to hack any wallet they want as well. By that time I am sure bitcoin developers will find a blockchain that will make it impossible for even the quantum computers to hack but that is literally the only risk.

Yes. Blockchain cant be hacked. Centralised database can.  But centralised database can be simply reverse back by administrator after hack is found.

Technically, a transaction is not confirmed when we press the send button, but when the transaction has received at least 1 confirmation (for very large transactions, it's safer to wait for 6 confirmations). Unconfirmed transacivmcanbe double spent, though, in this case the same output is not getting spent twice, rather a duplicate transaction would be made and one would be confirmed while the other will not be.

Maybe you can add that bitcoin transaction or payments is irreversible. So for me this is one strength of bitcoin, and that's why we need to be very careful on who send our funds are because there's no way to get it back once you press the send button. Lest we forget that bitcoin transaction are not anonymous are others might think. We only have bitcoin addresses though, and it's no way you can identify someone unless your information is known to the services you used, for example, exchanges requiring full KYC.

Regarding the hacking though, I think you got it wrong, decentralisation has nothing to do with hackers. The blockchain network is secure and so far we haven't seen it exploited by any groups.

Maybe what you are referring is online wallets, definitely this has been on going, but it has nothing to do with bitcoin decentralisation. Wallets are being hack because individuals haven't educated themselves on how to protect their assets.

^ There probably some advantages in the decentralized bitcoin network and it is a serious factor that needs to be addressed but even with a centralized network, these disadvantages can happen as well, or sadly all networks are subject to hacking and fraud. All types of networks regardless of how big or small it is, experience the same thing and each of them is already trying to address these issues. Governments already have laws about these issues and it is also applicable to the bitcoin network and authorities have ways of tracing fraudsters or hackers and relying on these laws is our only option. Nevertheless, since there is still no perfect network which cannot be hacked and has its own fraud defense system.

I think we had a language barrier. Tracing and retrieving funds are two different things, the blockchain is visible and all transactions made can be tracked. So it's possible to trace the flow of a particular output. And this transactions can not be reversed as the network is decentralized.
But if the funds are sent to a centralized exchanges, then actions can be taken, such as he freezing of an account for fraudulent activities.

Is they any other way the Fbi can trace somebody for fraudulent act using blockchain without the help of the exchange?

As you mentioned above, hackers can penetrate any network, so this is not a peculiar flaw of Bitcoin. And IIRC, the last time a flaw was exploited in the Bitcoin network was one or two years after it's Genesis block.
Note that, a hack on external platforms, like exchanges is not a flaw on the Bitcoin network.

This as well is not a peculiar flaw of Bitcoin, all forms of money has been used as a means to effect fraudulent activities. Bitcoin transactions are completely traceable, as the blockchain is visible to all, transactions however are anonymous, as only public addresses are linked to them.

The block chain has all information one needs to trace their funds in the event that it gets stolen, retrieving it however is a different matter as transactions are immutable once it has gotten sufficient confirmations. A network that will be able to reverse transactions cannot be classified as decentralized as there is a central authority in control.

They are so much importance of bitcoin working on a decentralized network. I will write a few things on decentralization.

When something operates on a decentralized network, it is prone to hacking, open-source, and low risk of system failure.

Bitcoin is a decentralized currency,

The principal aim of bitcoin is decentralization, to enable a friendly transaction module between two people. Without the presence of a middle man or a third party like the bank,

they are over 10,000 nodes in the bitcoin network each node records the network data and helps to verify transactions, Bitcoin is among the most decentralized currencies but not the best, they are other currencies that stand ahead of bitcoin in decentralization in this article https://www.quora.com/What-is-the-most-decentralized-cryptocurrency

Benefits of decentralization in bitcoin

Open source: Bitcoin decentralized network known as blockchain is accessible by anybody that wants to build anything on top of it, and also integrate bitcoin as a payment method for the project; with its proof of work that shows the consensus between those nodes, that proves every transaction legit,

Low risks of system failure: A centralized network can be faulty through the central computer that serves all other systems causing a delay in every transaction. In decentralization systems, a node that goes offline passes their workload to other nodes, so that applications can keep processing transactions without any delay.

Disadvantages of decentralization in bitcoin

Hacking: As I said, hackers can penetrate any network and have access to people's money and relevant online assets.

Fraud activities: The decentralized network of bitcoin tends to be untraceable. Unless your exchange wants to be part of the investigation then you can get back your funds but in most cases, the fraudulent act comes up every day regarding the blockchain network.

In conclusion, they can only be one currency that will take over bitcoin in the future, a currency that has a blockchain that tackles those disadvantages above. If users Can have a decentralized network that can provide them with sufficient pieces of information. About their activities and how to trace their money back then people can trust them better than they have done to other cryptocurrencies.

Thanks

SOURCE: https://dex.openledger.io/different-levels-of-decentralization-in-cryptocurrency/

https://www.inc.com/kenny-kline/3-important-advantages-of-decentralization.ht