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I think the point cryptica is making is that there is only one, central blockchain (logical centralization). This has a few centralizing effects on political ce
by kerkeslager 7y ago
I think the point cryptica is making is that there is only one, central blockchain (logical centralization). This has a few centralizing effects on political centralization which is what most users probably care about:
1. Governments need only to track one blockchain to track every BTC transaction. Attempts to deal with this mainly entail coin tumbling, which involves giving your coins to a centralized trusted entity. Larger tumblers are more effective, creating an incentive for further centralization.
2. The central blockchain is a performance bottleneck to event throughput. Attempts to deal with this mostly have to do with federation, i.e. forcing people to transact through another entity (usually a company you pay fees to) if they want faster transactions. Federation is much closer to centralized on the centralized/decentralized spectrum. Usually companies respect regulation from centralized government (meaning a government could force them to not process your transactions) increasing centralization further. And historically, federation happens unevenly, i.e. a large number of email users federating under GMail, which creates further centralization.
3. Mining competition has a very high entry cost because the minimum investment for entry is very high. The solution to this is pools under a centralized pool manager who typically collects fees and may or may not collect data on pool members.