The issue of centralization and decentralization of cryptos continues to be one of the biggest unresolved problems. Is there a way for it to be fixed? How can Decentralization Movement make a difference?
The problem of decentralization and trust
As you probably already know, the term “decentralized” that a lot of cryptos are using to describe themselves actually means that they do not have central servers. However, there is still the need for trust, especially now, when cryptos are getting adopted at a massive pace.
The crypto users need to trust the coin's developers, the websites that act as code hosts, their own computers and internet, security programs like antivirus, even printers. This is where one of the largest issues in regard to the crypto use lies – that we do not know who to trust. We are not even aware of all the things that we do not know about these processes.
Well, at least most people are not. For example, the process of generating deterministic keys is not known to that many crypto wallet users. They simply know that the process is happening, but what does it include? If the bad key gets generated by some unexpected accident, the wallet user may lose everything that they have.
The problem of trust that these processes will always continue to work flawlessly and keep our funds protected is one of the largest dilemmas concerning the use of crypts. Because of that, even some of the large names in the crypto world, like Vitalik Buterin, have questioned the issues of centralization and decentralization.
Can cryptos survive without their teams?
The codes behind the process need constant maintenance and upgrades as new issues are found and resolved. For this, the crypto users need to know that there are capable developers keeping an eye on things. Some in the crypto community that are supporters if Verge (XVG) have experienced centralization after Verge suffered its first 51 percent attack.
On this occasion, the code was not handled by the developer community. Instead, one of Verge's solo developers released an emergency update. Despite the noble intention, the rash decision caused an accidental fork. And this was not an isolated incident, as can be seen on CoinMarketCap's list of million-dollar projects that are being handled by a single individual.
This doesn't mean that some of the largest cryptos could not survive without their respective teams. Ethereum is a good example of this, and it would probably be capable enough to sustain itself is the team that has been keeping an eye on it simply disappeared. Bitcoin is an even better example. In fact, it may already be ‘flying solo‘ even now.
Centralization means control
Things were different back at the beginning of the crypto era. Back then, coins were developed and handled by professionals that were paid from various foundations. However, these days, things are different, especially considering that currencies are changing their focus, and are moving away from making coins.
Some cryptos, like TRON and Ripple, have their parent companies as holders of the majority of their tokens. This allows them to have control over the course that the crypto is taking, despite the fact that they keep denying this on every occasion. Sure, their software remains to be open-source, and the community has some minimal amount of control. However, any serious development regarding these coins, and others like them, usually have their parent companies behind them.
A lot of times, when a new ICO appears and promises decentralization, independence of government or any third-party influence, it turns out that it was majorly exaggerating. Dogecoin's creator, Jackson Palmer, even reported finding upgrade commands and kill switches in ERC-20 contracts. He even tweeted about this to inform the public.
Some of these contracts include an "upgrade"capability which also allows them to essentially upgrade/replace the token contract. I wonder why none of them have used said (centralized) capability to remove their ability to pause transfers?
— Jackson Palmer (@ummjackson) July 10, 2018
Of course, it is perfectly understandable that a new startup is not quite ready to give up control over their coins, and give it to the community. However, if that is the case, then it is not fair towards investors to claim otherwise.
What can be done about it?
So far, the discussions regarding this issue on social media proved to be fruitless. There are either those who are not interested in solving the problem, or those who are all too quick to give up on the entire concept of decentralization.
The only real solution that can be applied thus far is a slow, step-by-step approach. Trust is hard to give these days, especially to new technologies that are offered to us via the internet. However, giving small portions of trust over time might do wonders, and create a stable community, as well as real decentralization.
This is the concept of the so-called decentralization movement. Basically, those who do not understand the code, and are not sure if they can trust it or not have only three choices – to choose to trust it blindly, to choose not to trust it and give up right now, or to trust a third-party code reviewer. The same goes for things like Lightning Network – you simply need to trust the company that has created it, otherwise, the whole thing is never going to work.
So far, it would seem that this is the only way to move forward. It is understandable that the users are not willing, or even capable, to trust everyone. Still, a certain amount of trust continues to be necessary, otherwise the whole thing is just a waste of everyone's time and effort.