Original author: Fu Shaoqing, SatoshiLab, BTC Studio
Original source: Odaily Planet Daily
Some banter words on the Internet are often found by accident, but the reasons behind these phenomena are not explained. If we dig deeper, we often find good findings. From sorting out the second-layer knowledge of Bitcoin, to sorting out the application architecture of Web 3.0, and the disappearance of Satoshi Nakamoto, I have a better understanding of decentralization.
1. Cyber banter: Satoshi Nakamoto disappears, SBF goes to jail, CZ is restricted
An interesting causal correlation appeared on the network: "The pie is strong because Satoshi Nakamoto is gone, SOL is strong because SBF is in, and BNB is strong because CZ is fast in, so why is ETH weak Needless to say?". For the rise of Ethereum, many people began to shout to "capture God V alive". Many people often laugh when they see such banter.
Some banter words on the Internet are often found by accident, but the reasons behind these phenomena are not explained. If we dig deeper, we often find good findings.
As the founder of Bitcoin, although the reason for his disappearance is unknown, there are several possible speculations:
Personal privacy protection: Satoshi Nakamoto may have chosen to disappear to protect his privacy and security. Because he is making a cryptocurrency, and through the research and accumulation of predecessors, Satoshi Nakamoto feels that his "creation" is more likely to succeed, and in order to avoid attracting too much attention and controversy in the real world, he may also want to avoid too much attention and interference. "Disappearing" is a great way to do it.
Decentralization: Through his research on Satoshi's original statements and emails, he has considered a lot about the design of Bitcoin, not only focusing on the implementation of technology, but also considering many economic and sociological aspects. Another possible explanation for Satoshi Nakamoto's disappearance is to ensure the decentralization of Bitcoin. He may believe that a system without a centralized leader can be truly free and independent. At the same time, this decentralization can also prevent the concentration of power, which can prevent Bitcoin from being controlled by a few people or institutions, which is more conducive to the development of the community and joint decision-making.
The protection of personal privacy should not have much impact on Bitcoin, and decentralized design may be an important design consideration. Especially compared with Ethereum & V God, the Ethereum development route planned by V God has aroused many people's doubts, which is a relatively serious centralization. Decentralization is reflected in multiple levels and aspects, and we will use some analysis later, from multiple observation angles and theoretical systems, to see the role of decentralization.
2. The basic concept of decentralization
2.1. Decentralized, Distributed, Centralized
A common classification of system structure in the real world: Centralised, Decentralised, and Distributed, which are not only the three common structures in technical implementation, but also in other fields such as social organization.
These three structures are described in the blockchain space, and I use this diagram to refer to Vitalik's article: The Meaning of Decentralization, linked to the URL:
https://medium.com/@VitalikButerin/the-meaning-of-decentralization-a0c92b 76 a 274
There is often some controversy in China about this graph, which is that the Decentralised, Distributed graph is inverted. From the perspective of control and decision-making, it should be able to eliminate this kind of controversy, and be able to understand Decentralised,Distributed. There should be no controversy about Centralised(A) in the diagram from any perspective, so we will only compare decentralization and distribution.
Mr. Hong Shuning has a saying that "the essence of blockchain is decentralization", which is very accurate. In this article, we talk about blockchain and decentralization, usually referring to the same thing. Decentralised decentralization is actually a decision-making center composed of multiple nodes, and its control and decision-making also require a certain number of nodes to participate, at this time the control and decision-making are called consensus. For example, in Bitcoin, full nodes with mining power have the ability to decide what new blocks are generated and written to new blocks, and those nodes that do not have mining power are read-only nodes or validators. This is even more pronounced in the POS and DPOS chains, where only consensus nodes can decide what data to be produced and written to a new block. The difference between synchronous and asynchronous algorithms in consensus protocols is also more obvious, which determines the number of nodes that can be accommodated in the blockchain network.
In the distributed system, there is no obvious center at all, only nodes, any node can join or leave the network at any time, and its control and decision-making are local, which is also a reason why the distributed system can achieve very large performance. Does this eliminate the common controversy of Decentralised, Distributed?
Readers can refer to Hong Shuning's "Hong Shuning: Blockchain and Cryptocurrency" and Vitalik's "The Meaning of Decentralization", comparing the content of the two articles, many people should be more likely to understand the meaning and understand the boundaries of some concepts. For the schematic diagram, I used the diagram from the Vitalik article, in which Distributed is a more generalized distributed system, such as the Lightning Network, Nostr, eMule, etc.
According to my summary when I sorted out the relevant materials for the construction of the second layer of Bitcoin (see references), let's compare the main characteristics of the blockchain system (decentralized), distributed system, and centralized system. These features may be subject to controversies in understanding and inaccurate summaries, and we only need to focus on the significant differences in them, such as the ability to trust the ledger.
(1) Advantages and disadvantages of decentralization (blockchain system).
The advantages and disadvantages of decentralization (blockchain system) can be referred to the above table.
Here is a quote from Mr. Hong Shuning: From the perspective of computer systems, blockchain technology is a new distributed system, but the most fundamental difference between blockchain and traditional distributed systems lies in its decentralized characteristics. The meaning of decentralization means that there is no central controller who can control the operation of the blockchain network, neither stop it nor manipulate the data in it, and the destruction or wrong behavior of any node will not affect the entire system, and the biggest problem of centralized systems lies in this. The decentralization feature brings three benefits to the blockchain: fault tolerance, anti-attack and anti-collusion, thus making the blockchain an independent, credible, and anti-monopoly technical system, providing technical support for storing and transferring value and trust on top of it.
If you memorize it succinctly, you only need to remember this ability to trust the ledger, which is something that distributed and centralized systems do not have. This is also the reason why cryptocurrencies were created only after the creation of the blockchain system.
(2) Advantages and disadvantages of distributed systems
Advantages of distributed systems:
Scalability: Nodes can be added or reduced at any time, and the system has high scalability and improves fault tolerance.
High performance: Tasks can be processed in parallel to improve the performance of the system, and each node can handle different tasks at the same time.
The disadvantages of distributed systems include:
Complexity: The design and implementation of distributed systems are relatively complex, and issues such as communication, consistency, and data synchronization between nodes need to be considered, which increases the development and maintenance costs of the system.
Security: The security of distributed systems is an important issue, and communication and data transmission between nodes need to be encrypted and authenticated to prevent data leaks and attacks.
Difficult to debug: Due to the complexity of distributed systems, it can be more difficult to debug and troubleshoot when there is a problem with the system.
and (3) the advantages and disadvantages of centralized structure
Advantages of a centralized structure:
Simple control: Clear controls and decision-makers allow for better organization and coordination of work.
High efficiency: It can realize the efficient concentration and management of resources and improve the efficiency of resource utilization.
The disadvantages of a centralized structure include:
Single point of failure: The failure of the central node can bring down the entire system, so the reliability of the system is low.
Privacy risk: The central node has access to and control over all data, which can lead to privacy risks.
Concentration of power: A centralized structure may lead to the problem of power concentration, so that the central node has greater control and decision-making power.
2.2. Embodiment of decentralization
When introducing the embodiment of decentralization, we need to often contrast it with centralization. At the same time, we also break down the contrast between centralization and decentralization into several levels.
Note: It is best to have someone who has a deep understanding of the classification of philosophical knowledge systems in this place to sort out, so that it will be more accurate to stratify professional knowledge. I will mainly use two levels of natural science and social science to describe it here.
From the table above, we can see that decentralization can be embodied at multiple levels. We have entered the information age for many years, and our understanding of centralization and decentralization has produced many cases, often comparing and local concepts. Such as the description, Read, Write, and Owner in Web1.0, Web2.0, and Web3.0.
Decomposition at the level of natural sciences, on the one hand, is centralization and decentralization at the software level. For example, the centralization and decentralization of information (data) publishing, the centralization and decentralization of information (data) management, the centralization and decentralization of account (identity), the centralization and decentralization of software architecture, and ......;
On the other hand, there is the centralization and decentralization of hardware. For example, in 2022, the AWS and Cloudflare ramming incidents, which included the centralization of the network and servers. After the ramming incident of cloud service providers, many people began to realize that if the hardware is centralized, then even if the software built on the upper layer is decentralized, once someone can control the centralized hardware, in fact, the system built on these hardware cannot be regarded as completely decentralized.
THE FAILURE OF FOREIGN CLOUD SERVICE PROVIDERS AWS AND CLOUDFLARE ON JUNE 21, 2022 CAUSED THE DISRUPTION OF A LARGE NUMBER OF WEB3.0 PROJECTS, AND SOME PEOPLE JOKED THAT AS SOON AS THESE CENTRALIZED DATA CENTERS WENT DOWN, WEB3.0 BECAME WEB0.3. This also shows the importance of hardware decentralization, and the current cloud infrastructure is basically centralized.
At the social science level, with the development of blockchain technology, DAPPs are becoming more and more abundant and embodied. For example, the organizational form of DAO and the various confirmation mechanisms for decision-making are already cases of centralization and decentralization in the sociological sense. The significance of Satoshi Nakamoto's disappearance, and at this level, this disappearance is a very important decentralization, and we haven't seen other blockchain systems be able to do this. At this stage, blockchain technology is becoming more and more in-depth to have an impact on the real world. This involves more knowledge of economics and sociology, which requires the continuous development of blockchain technology to be more reflected, and also requires experts in the field of sociology to make more analysis and summary.
Teacher Hong Shuning said: "Blockchain technology can't change the world, what can change the world is the decentralization trend based on blockchain technology." Decentralization has changed economic and political mechanisms that have lasted for thousands of years, and its impact on humanity has been extremely far-reaching, comparable to the Enlightenment of the seventeenth century. This is the understanding of economics and sociology.
Some time ago, the famous entrepreneur Zhang Ruimin was a guest and walked with Hui and said a knowledge point, in the I Ching gossip, the highest level is that the dragons have no leader. Compared with the hidden dragon should not be used, the dragon is in the field, the flying dragon is in the sky, and the dragon has regrets, is the dragon's leaderless interpretation of decentralization at the philosophical level?
For decentralization, also refer to Ethereum founder Vitalik Buterin's February 2017 article "The meaning of decentralization", which elaborates on the meaning of decentralization. Vitalik Buterin argues that there are three perspectives that distinguish between centralization and decentralization of computer software: architecture, governance, and logic. Architecture centralization refers to how many nodes a system can tolerate collapse and can continue to operate, governance centralization refers to how many individuals or organizations need to ultimately control the system, and logical centralization refers to whether the interfaces and data presented by the system appear to be a single whole. Is architecture and logic a centralization and de-hollowing analysis at the level of natural science, and is governance an analysis at the level of sociology?
2.3. Efficiency and Equity in Economics
In order to better understand the centralization and decentralization at the sociological level, we can understand it from some related things and service objects. For example, the issue of efficiency and fairness in economics is very similar to the role of the incentive mechanism and governance mechanism of the economic model in the blockchain. If you're looking for efficiency, full centralization or a very centralized approach like DPOS is the better option, and decentralization is the better choice to keep the other features.
In order to better understand the combination of incentive mechanism and governance mechanism of economic model, we first understand the two goals of maximizing economic benefits and maximizing social benefits in the real society. The balance between the two is usually achieved through a combination of the system of primary distribution and redistribution.
An important principle to be embodied in the distribution system is to strike a balance between efficiency and fairness, to oppose egalitarianism, and to prevent income disparities. The distribution of national income is divided into two processes: primary distribution and redistribution. The primary distribution of national income based on efficiency criteria may lead to an excessively large gap between the rich and the poor, and the government can control the income gap within a reasonable range and maintain social equity through the redistribution of national income that aims to achieve the overall and long-term interests of society.
The same problem exists in the world of blockchain, and it may be easier to solve the problem of maximizing economic benefits if we rely solely on the incentive mechanism of the economic model, just like the function of the market mechanism. But the mere incentive mechanism is flawed. For example, in Bitcoin mining, if the hashrate of a single mining pool is too large, the problem of a 51% attack will occur, and if it is not interfered with, it will disrupt the normal operation of the Bitcoin network. In addition, such as the DAO incident on Ethereum, due to a vulnerability in the system, more than 3 million ETH assets were transferred out of the DAO asset pool. These issues cannot be well addressed without notification in the community and through relevant governance measures.
Through the incentive mechanism of the economic model and the related governance mechanism, the interests of all participants of the blockchain project and the blockchain ecology are guaranteed. The incentive mechanism of the economic model ensures the maximization of efficiency, and community governance, including on-chain governance and off-chain governance, is more important in solving the problem of maximizing social benefits. Make trade-offs and trade-offs between efficiency and fairness.
3. Decentralization from the perspective of Bitcoin's two-layer construction and Web 3.0 application architecture
3.1. Layer 2 construction and decentralization of Bitcoin
Here we need to refer to the table in "Sorting out the Basic Knowledge System of Bitcoin Layer 2 Construction". In this table, you can see that there are three different structures of Bitcoin two-layer construction, which make various trade-offs for decentralization.
The layer-2 construction based on the chain is to abandon a certain degree of decentralization of Bitcoin, so as to achieve the improvement of other performance indicators. Based on the distributed system, the implementation complexity is increased, and the decentralization of Bitcoin is ensured at the second layer, and the performance and function are expanded. The centralized system does not change the decentralization of the assets on Bitcoin, and only uses the statistics or auxiliary functions of the second layer to complete the auxiliary management of the first layer of Bitcoin.
3.2. Application architecture and decentralization of Web 3.0
Here we need to quote the Web3.0 application architecture diagram in "Observing Bitcoin Layer 2 from the Perspective of State Machines, You Can See the Architecture and Construction Path of Future Web3.0 Applications".
We will see that the future Web 3.0 application is a complex architecture built on the blockchain system (decentralized), distributed system, and centralized system. Among them, the blockchain system and its second-layer extension complete the transmission and processing of value, and the distributed system and centralized system complete the transmission and processing of information. Without a decentralized blockchain system, we can only stay in the Web 2.0 era. With the blockchain system, we can build more and richer applications. It's just that the current development of blockchain is not mature enough, and this situation is not obvious enough. The application of Web 3.0, especially with the decentralized blockchain system, will greatly change our current state of technology and society. The era of Web 3.0 will be a glorious era that will surpass our current imagination.