Understanding Centralized Cryptocurrency - page 2.

andrew1carlssin

jr. member

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#Please, read:Daniel Ellsberg,-The Doomsday *wk

Quote from: brawdias on May 27, 2018, 10:24:41 PM

How is a centralized cryptocurrency still considered a cryptocurrency ? For my newbie understanding of the blockchain concepts, it should all be decentralized...

Hi brawdias,

I would like to have more time to write more lines here .. unfortunately clock is ticking and 'we' need go through a priority list, but my guess is that what you're looking for is something regards to game theory ...

I find this article interesting..

What is Cryptocurrency Game Theory
https://blockgeeks.com/guides/cryptocurrency-game-theory/

Happy research .. keep us updated with your finds ..

--AC

Coin-1

legendary

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Quote from: bitmover on May 27, 2018, 11:28:44 PM

There are few thinks you need to consider. First, there are 3 main types of decentralization (By Vitalik Buterin):

Quote from: Vitalik Buterin

Architectural (de)centralization — how many physical computers is a system made up of? How many of those computers can it tolerate breaking down at any single time?
Political (de)centralization — how many individuals or organizations ultimately control the computers that the system is made up of?
Logical (de)centralization— does the interface and data structures that the system presents and maintains look more like a single monolithic object, or an amorphous swarm? One simple heuristic is: if you cut the system in half, including both providers and users, will both halves continue to fully operate as independent units?

The majority of the Ethereum coins are owned by its creators. I think that this proportion can be treated as centralization too. They might sell a huge amount of their coins on the crypto exchange markets for fiat money, and the ETH price will be dumped drastically.

That's why the real decentralization is contemplated that the majority of a crypto currency emittion is not concentrated in the hands of one individual or organization.

audaciousbeing

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Quote from: brawdias on May 27, 2018, 10:24:41 PM

How is a centralized cryptocurrency still considered a cryptocurrency ? For my newbie understanding of the blockchain concepts, it should all be decentralized...

Crypto currency itself is not by default decentralized the reason for such misconception is because the term is always common among crypto currency and any currency that would want to claim its rightful place had to be decentralized in nature or claim to be one. There is really no defined line between centralization and decentralization. Today even though bitcoin claims to be a decentralized crypto currency, we have centralized exchange sites, we have centralized wallet services where you can exchange for any coin or sell directly.

And most importantly, despite what we are made to believe that mining is decentralized just like what @bitmover illustrated, the moment any of the major miners merge, they can conveniently control the direction of price and nothing anyone would be able to do about it because there wont be any regulator to forestall such move just like the case it would have been in the business world where merging of two firms is likely to cause any form of monopoly of the market they operate.

odolvlobo

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Quote from: brawdias on May 27, 2018, 10:24:41 PM

How is a centralized cryptocurrency still considered a cryptocurrency ? For my newbie understanding of the blockchain concepts, it should all be decentralized...

I don't think there is a standard definition of a cryptocurrency, but I think that a central feature is the use of cryptographic signatures in order to ensure the integrity of the ledger. This feature is necessary whether the ledger is decentralized or not.

bitmover

legendary

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bitcoindata.science

These concepts are not related.

Today Bitcoin Mining is almost centralized:

If one day all those big 4 mining pools merge, bitcoin mining is going to be centralized. Will bitcoin not be considered a cryptocurrency anymore?

There are few thinks you need to consider. First, there are 3 main types of decentralization (By Vitalik Buterin):

Quote from: Vitalik Buterin

Architectural (de)centralization — how many physical computers is a system made up of? How many of those computers can it tolerate breaking down at any single time?
Political (de)centralization — how many individuals or organizations ultimately control the computers that the system is made up of?
Logical (de)centralization— does the interface and data structures that the system presents and maintains look more like a single monolithic object, or an amorphous swarm? One simple heuristic is: if you cut the system in half, including both providers and users, will both halves continue to fully operate as independent units?

Second, what is a cryptocurrency? I think its hard to define, but in a simply way we could say it's just digital cash

There were other cryptocurrencies before bitcoin, but bitcoin was the first to survive because it was decentralized, inspired on a P2P file sharing. Thanks to satoshi who invented a decentralized consensus mechanism, the proof of work.

brawdias

newbie

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How is a centralized cryptocurrency still considered a cryptocurrency ? For my newbie understanding of the blockchain concepts, it should all be decentralized...

Topic: Understanding Centralized Cryptocurrency - page 2. (Read 470 times)