Crypto Attorney Preston Byrne Says Ethereum is ‘Arguably Centralized’, Could Spell Doom for ETH
In a recent blog post written by Preston Byrne, an attorney at Byrne & Storm, he mentioned that Ethereum is ‘doomed to be centralized.’ He started by saying that he would be presenting a list of suggestive but not definitive evidence of centralization in the ecosystem.
For him, Ethereum’s being centralized or not depends on the opinion of each individual and the data provided to sustain their claims. He indeed said that Ethereum is more centralized than the core of a neutron star falling into a black hole.
He explained that Ethereum’s decentralization is at least ‘arguable.’ For him, there might have been a time in the past where the network could have tolerated the loss of nodes without having an impact on the network. However, this is no longer true.
There are five points marked by Byrne about why Ethereum is decentralized.
- Ethereum is reliant on a handful of private companies to survive.
- Block reward cuts can be agreed without objection.
- Tokens remain in just a few hands.
- Three entities could just reduce mining rewards.
- Infura dominates the market for node infrastructure.
According to him, Ethereum’s pre-mine looks very suspicious. There are large concentrations of Ether among a few individuals. If the owners of the funds would like to crash ETH they would be able to do it. Furthermore, he said that Ethereum has 13 clients (or more) but most of the nodes run Geth or Parity.
Due to the fact that Ethereum has not solved scaling issues, it means that centralized service providers have a lot of influence on the node infrastructure. The author is making reference to Infura, which provides tools and access to Ethereum and IPFS.
About it, Byrne wrote:
“The fact that everyone relies on Infura for the system to work, combined with the inability of core devs to find credible scaling solutions, means node counts are falling quickly and the result is effective centralization in Infura’s hands.”
Finally, he said that there are too-easy alignments of interests and too-rapid decision-making processes. There are major changes like adjustments that take a very short time to be discussed among the community and to take a decision on how to scale the network. According to Byrne, as there is a lack of public disagreement for changes, this could mean that the modifications and new upgrades are informally agreed before they are proposed.
As he says, he does not know if Ethereum is centralized or not, but there is not enough data to show the contrary.
He ended the blog post saying that outrageous claims have been made for Ethereum over the last years. These claims have been diverse and extraordinary, which require also great evidence. However, the decentralized claim could be in doubt.
Ethereum is a network that is used by developers to create their own tokens and deploy decentralized applications. At the end of 2017 and the beginning of 2018, the network experienced incredible growth due to the large number if Initial Coin Offerings (ICOs) being launched to the market. However, during the last few months, the network has been in a bear trend that has severely affected its price and its position in the market.
Currently, Ethereum is the third largest digital asset in the market. Each coin can be purchased for $124 and it has a market cap of $13 billion.