Decentralization

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Decentralization or decentralisation is a state opposite to centralization. In describes the process in which activities, weight in decision making are distributed or delegated away from a central, authoritative location or group.

Decentralisation is a natural approach for building robust, reliable, trustless and censorship-resistant blockchain networks without central authorities or single points of failure. In decentralised network users have reliable trustless access to the state of the distributed data and confidence that operations with this data were not forged, censored or erased by any central authority. Therefore decentralisation is a primary solution to the data availability problem.

Decentralization is the central ethos of blockchain technology. Benefits of decentralisation are the main advantage of blockchain solutions. However, not all solutions are the same. In every solution there are threats to decentralisation. These threats set a risk that benefits of decentralisation will decline or vanish.

Layers of decentralisation

Benefits of decentralised solutions

Threats to decentralisation

Incomplete or faulty consensus rules

Database rebranding

Permission for participation

Checkpoint providers

Watchtowers

Colusion of validators

51% attack

Long range attacks

Parameter Generation Ceremony

Unfair economics

Fair share principle

High orphan block percent

High volatility of rewards

High business entry point

Forces which stimulate centralisation

Asic manufacturers
Mining pools
Natural resources
Rich get richer problem

Poor data availability

Providers of the off chain data

Poor design of incentives

Bootstrapping solutions

Achieve nodes

See also

References

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