Cryptocurrencies. Blockchain. Decentralisation. Really??
When asked “What is Bitcoin?” or “What are cryptocurrencies?”, one keyword that will always be mentioned in the same sentence is the word ‘decentralisation’. In the blockchain world, many take pride in the fact that blockchain is decentralised, and there is no one central party having full control or authority over the system/network. However, is this truly the case?
Theoretically, on the blockchain network, such as Bitcoin, every node has a copy of the ledger and transactions can only be successfully added onto the blockchain via consensus. According to Satoshi Nakamoto’s vision, anyone with a CPU and have connection to the internet can participate and have a say in governing the network, base on a one-CPU-one vote concept.
However, from my perspective, things aren’t exactly panning out the way that it was envisioned. It might be true that blockchain may have allowed us to distance ourselves from the strangle hold of the central government and central banks, but the major population is still under the control of the rich and powerful.
If we are to question, who are the ones running the nodes and supporting the network.
If we look at the hashrate distribution on Bitcoin, we can see that with AntPool, Poolin, F2Pool and ViaBTC combined, they account for over 50% of the network’s hashrate. With their combined effort, they have the influence to dictate the future of the network. This to me looks like a form of centralisation as compared to decentralisation.
Apart from hashrate mining, another perspective is in terms of bitcoin holdings.
From the table above, we can see that the top 0.04% of addresses account for 63.08% of bitcoin. Some may argue that these addresses could be owned by central exchanges or organisations. But this argument still does not dismiss the fact that the bulk of bitcoin is held in the hands of the minority and these whales, as how the cryptocurrency world term them, have the power/influence to move markets at their disposal.
In today’s world, act of centralisation seems to be very much disguised under the facade of democracy and decentralisation.
