Jimmy Song, one of the famous Bitcoin Developers, has recently taken upon himself to explain what he thinks of decentralization. The explanations were pretty impressive as it was in the form of four Yes/No questions. Jimmy made sure that the concept of decentralization that we so often associate with blockchain technology is understandable to everyone. Let us look into all the four questions to understand decentralization better.
Did you have an Initial coin Offering (ICO)?
If your answer to the question is YES, then Jimmy thinks your project is not decentralized, as a few at the top control the finance of the project. Yes, others may have bought a few tokens, but the primary financial resources of the project are with a select group of people who have the final say.
Is there a core team or select group of creators?
If the answer to this question is YES, then the project is not decentralized. The Jimmy argument to the problem is, a right decentralized platform would never have any core or key decision-making team. Everyone associated with the project be it a developer, a financer or the target audience who have bought in the tokens have an equal say in any matter of a decentralized project.
Does your project hold a possibility of Hard Fork?
If the answer to your question is YES, then you may be in for a shock, as Jimmy thinks your project is not decentralized either. The Bitcoin developer is of the opinion that if your project needs a backward upgrade to make changes, it is not necessarily decentralized. In a Medium article earlier, Song has strongly pointed out that hard forks can’t be part of a decentralized system. As creating a fork leads to a new coin along with the old one which is not compatible with the new network.
Does your project involve governance?
If the answer to this question of Jimmy is YES, then your project is centralized. The central theme of the pioneer bitcoin was the removal of middlemen and third-parties from getting involved. Its specifically meant to be a Peer-to-Peer network. Thus, the involvement of any authority with power and monopoly is a centralized form of scheme.
Although there are no defined or set rules to distinguish between a centralized project or a decentralized project, the topic is up for some serious debate on social media and especially in the cryptocurrency realm.
Joseph Young, Crypto Journalist Believes Exchanges with KYC Option are not Decentralized
Joseph young a noted crypto journalist has also put his views on display through a tweet. Young believes exchanges are the most centralized part in the crypto and blockchain ecosystem. He thinks the whole KYC is a centralized verification system. Young in his tweet noted,
“Many decentralized crypto exchanges have not been successful because they’re a hybrid. The exchange either has to be completely decentralized/uncensorable or centralized, in between doesn’t have many merits. A decentralized exchange doing know-your-customer (KYC) kind of destroys the point.”
The debate over decentralization has been in the limelight for quite some time now, and it does not seem to die down any sooner. However, a decentralized or a centralized network, the mutual aim should be a better form of technology in any case. Many analysts believe the crypto world must first focus on improving upon security and ease of use which they have advertised since its inception.