by Lumai mubanga
The whole point of developing cryptocurrencies has been taking control back to the people, the users. Bitcoin and indeed all cryptocurrencies have been developed to empower ordinary users with complete control and easy access to their assets, in this case, money. Thus, the central hold and control of huge financial firms on people’s money have been threatened.
As a sign of “hitting” back, we have witnessed the rise in enterprise blockchain. The whole essence of enterprise blockchain, it seems, is to avoid the total loss of power on financial control to peer to peer networks, while at the same time, retaining and benefitting from the same technology that threatens their business empires.
Is the dream of promoting peer to peer transactions finally fading away with the coming of enterprise blockchain? Could this be as a result of the bitcoin’s architecture’s failure to completely adopt a hundred percent decentralization? Is bitcoin 100% decentralized? This article looks at some possibilities of that. Some services like peer to peer network are completely decentralized. However, some services seem to fall in between and are not clearly defined, leading to conclusions that bitcoin is not 100% decentralized.
While the underlying protocol on which bitcoin is designed and built is decentralized, many services that have been developed on top of it are to some extent decentralized and centralized as the following examples show.
Bitcoin mining, while open to all users to mine, is actually a centralized aspect of it. The cost of mining has proved astronomical and costly to such an extent that only individuals with huge capital can pull their resources to mine. This has pushed ordinary users with no capital to the sidelines.
While bitcoin nodes are all over, any update to the software is strictly controlled by a group of developers who are trusted by the community and holds power to control any proposed system changes. Any unwelcome system changes that ran parallel to this powerful developer team are rejected, can initiate unending debates, and at the most, result in a fork.
If you wanted to convert bitcoin to any fiat currency of your choice, where would you go? Who determines the exchange rate? You will notice that for such transactions, there are third party entities were the exchanges are done. Are those part of the decentralized ecosystem within the bitcoin network?
As can be seen from the above three examples, we can safely conclude that bitcoin is not a hundred percent decentralized. Indeed, it appears no system is a hundred percent decentralized or centralized. The degree of decentralization differs from system to system. If bitcoin will have to be 100% decentralized, it still has a long way to go.