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But that's also false. In practice the network isn't decentralized at all. This was very obviously the case since the very first bitcoin mining pool formed in 2

But that's also false. In practice the network isn't decentralized at all. This was very obviously the case since the very first bitcoin mining pool formed in 2010. The advantages of re-centralizing are far too great, and the whales have a clear financial interest to put themselves in charge of the network, so that's what they do. Any system that gives you more power because you put more starting cash into it can't be described as "providing financial democratization", so that characterization is just wrong. It's also wrong that they can't take away your ability to transact, the miners absolutely have the ability to block your wallet or ignore your transactions. And I hope you can see the uselessness in creating a system that fits some vague definition of the word "decentralized" while nearly everyone who uses it just interacts with the centralized services on top of it, because maintaining the illusion of decentralization is so difficult and pointless that nobody actually bothers with it. Maybe it's "decentralized" if you're a whale and you want to capture large portions of the market with fraud without anyone being able to stop you. For everyone else, it's just not. The "base network" here is just for show and marketing purposes, it adds nothing of value to any real legitimate activity.

hackinthebochs 4y ago
I don't see a substantive criticism here. I agree that the term decentralized is a misnomer, if only because the term is so vague. Democratization is the term I use to describe crypto. The question is whether powerful entities can interfere with the expected behavior of the network against the will of users. I don't see that this is the case. Sure, miners are in a position to ignore transactions, but doing so would require a high level of coordination that doesn't go against the ideal of "democratization". Yes, if everyone is against you, you're screwed either way. But crypto raises the level of coordination required for such an act to the point of implausibility. Besides, if such a coordinated attack against an individual was in progress, we would likely see hashrate reorganize to short-circuit the attack. This is democratization.
- hnthrow1010 4y ago
  And again, using that term is wrong, because by definition these networks only give more power to those who have more money. Proof-of-work and proof-of-stake are intentionally designed to work that way. There is no democratization or fairness. The level of coordination isn't implausible either, it's already happened several times already, and there's nothing actually stopping it from happening again other than some vague "trust" that the system is going to work in a way that crypto promoters say it will. Just to make this clear: If you personally don't have a vote then there's no democratization. You don't have one if you don't run a full node, which it's very likely that you don't. And if you do, the hashpower (i.e. voting power) of the full nodes you run is determined by how much money you invest in mining hardware. It's not democratic in any possible way you look at it. I'm not just making this up, crypto developers will readily tell you that the system is purposely designed this way to not be democratic.
  - hackinthebochs 4y ago
    The premise of your argument is incorrect. One does not need to participate in securing the network for the network to represent the "democratization of financial power". Democratization doesn't mean "voting", it means something like make equally accessible. What crypto does is make financial transactions equally accessible. The method by which this is accomplished (proof of work/stake) isn't equally accessible, but that is a tangential concern to the accessibility of executing financial transactions. What matters is the miners can't unilaterally interfere with the expected function of the network. Further, that the coordination required to interfere with the expected function is implausible and/or prohibitively expensive. >The level of coordination isn't implausible either, it's already happened several times already For instance? And what may have happened in the early days of the network is irrelevant to what is possible today.
    - hnthrow1010 4y ago
      >but that is a tangential concern to the accessibility of executing financial transactions No, I disagree. It's exactly the same, because without that concern your transactions can be deprioritized or blocked. Miners can absolutely interfere with the expected function of the network, because it's entirely them who determine what the expected function is in the first place. There are no other systems in place to guarantee the functioning of the network and as a user (not a miner) you have no say in the matter at all. They do whatever they want and you're forced to accept it unless you can afford to buy huge amounts of mining hardware and take over the network yourself. I believe I addressed this all already, it's not democratic by any definition of that word or in any way you could ever possibly look at it. The original bitcoin whitepaper proposed that many more people would be running full nodes and (correctly) stated that the security properties of the system would come from this, and if that ended up being a realistic way to set the system up then maybe you could have said it was more democratic. But this didn't work out in practice, and it's been very obvious since 2010 that it would never work out that way for multiple reasons, one being that the financial rewards from re-centralizing into mining pools are far too great to pass up. >For instance? And what may have happened in the early days of the network is irrelevant to what is possible today. Both bitcoin (in 2013) and ethereum (in 2016) have reverted transactions that the miners didn't agree with. Any statements from them that the network is "immutable" or "decentralized" or "democratic" is simply a lie. Nothing has actually changed since the "early days", the conditions for them to do it again are still there and will likely always be there because this is how the network is fundamentally designed to function, based on a consensus of those who have the most resources available to them to mine. For a smaller coin, it may not even be possible to tell that this is happening, because blocks that the miners all agree they don't want to process can simply be dropped with no log of that happening. Now, if you could legally require that cryptocurrencies need to set up a legal entity that gives a certain level of democratic control to its stakeholders then that's probably the only realistic way you could change things, but I doubt that would ever happen because crypto enthusiasts don't seem to care much for laws or regulations. And in any case, doing so would not be an innovation, it would still have all the other fatal flaws of cryptocurrency. Best case scenario, it would just be moving back into a poor approximation of a credit union, which is something that already exists.

hackinthebochs 4y ago

I don't see a substantive criticism here. I agree that the term decentralized is a misnomer, if only because the term is so vague. Democratization is the term I use to describe crypto. The question is whether powerful entities can interfere with the expected behavior of the network against the will of users. I don't see that this is the case. Sure, miners are in a position to ignore transactions, but doing so would require a high level of coordination that doesn't go against the ideal of "democratization". Yes, if everyone is against you, you're screwed either way. But crypto raises the level of coordination required for such an act to the point of implausibility. Besides, if such a coordinated attack against an individual was in progress, we would likely see hashrate reorganize to short-circuit the attack. This is democratization.

hnthrow1010 4y ago
And again, using that term is wrong, because by definition these networks only give more power to those who have more money. Proof-of-work and proof-of-stake are intentionally designed to work that way. There is no democratization or fairness. The level of coordination isn't implausible either, it's already happened several times already, and there's nothing actually stopping it from happening again other than some vague "trust" that the system is going to work in a way that crypto promoters say it will. Just to make this clear: If you personally don't have a vote then there's no democratization. You don't have one if you don't run a full node, which it's very likely that you don't. And if you do, the hashpower (i.e. voting power) of the full nodes you run is determined by how much money you invest in mining hardware. It's not democratic in any possible way you look at it. I'm not just making this up, crypto developers will readily tell you that the system is purposely designed this way to not be democratic.
- hackinthebochs 4y ago
  The premise of your argument is incorrect. One does not need to participate in securing the network for the network to represent the "democratization of financial power". Democratization doesn't mean "voting", it means something like make equally accessible. What crypto does is make financial transactions equally accessible. The method by which this is accomplished (proof of work/stake) isn't equally accessible, but that is a tangential concern to the accessibility of executing financial transactions. What matters is the miners can't unilaterally interfere with the expected function of the network. Further, that the coordination required to interfere with the expected function is implausible and/or prohibitively expensive. >The level of coordination isn't implausible either, it's already happened several times already For instance? And what may have happened in the early days of the network is irrelevant to what is possible today.
  - hnthrow1010 4y ago
    >but that is a tangential concern to the accessibility of executing financial transactions No, I disagree. It's exactly the same, because without that concern your transactions can be deprioritized or blocked. Miners can absolutely interfere with the expected function of the network, because it's entirely them who determine what the expected function is in the first place. There are no other systems in place to guarantee the functioning of the network and as a user (not a miner) you have no say in the matter at all. They do whatever they want and you're forced to accept it unless you can afford to buy huge amounts of mining hardware and take over the network yourself. I believe I addressed this all already, it's not democratic by any definition of that word or in any way you could ever possibly look at it. The original bitcoin whitepaper proposed that many more people would be running full nodes and (correctly) stated that the security properties of the system would come from this, and if that ended up being a realistic way to set the system up then maybe you could have said it was more democratic. But this didn't work out in practice, and it's been very obvious since 2010 that it would never work out that way for multiple reasons, one being that the financial rewards from re-centralizing into mining pools are far too great to pass up. >For instance? And what may have happened in the early days of the network is irrelevant to what is possible today. Both bitcoin (in 2013) and ethereum (in 2016) have reverted transactions that the miners didn't agree with. Any statements from them that the network is "immutable" or "decentralized" or "democratic" is simply a lie. Nothing has actually changed since the "early days", the conditions for them to do it again are still there and will likely always be there because this is how the network is fundamentally designed to function, based on a consensus of those who have the most resources available to them to mine. For a smaller coin, it may not even be possible to tell that this is happening, because blocks that the miners all agree they don't want to process can simply be dropped with no log of that happening. Now, if you could legally require that cryptocurrencies need to set up a legal entity that gives a certain level of democratic control to its stakeholders then that's probably the only realistic way you could change things, but I doubt that would ever happen because crypto enthusiasts don't seem to care much for laws or regulations. And in any case, doing so would not be an innovation, it would still have all the other fatal flaws of cryptocurrency. Best case scenario, it would just be moving back into a poor approximation of a credit union, which is something that already exists.