Q&A series on basic concepts of Bitcoin (Part 6)

6. Centralization and decentralization

1. What is the decentralization of the Bitcoin system?

1.1 Transactions no from the bank

1.2 Ledger decontrol

1.3 Decentralized storage structure

1.4 Decentralization of general ledger bookkeeping rights

1.5 Decentralized account verification

1.6 Issuing coins no the center

1.7 Management Decentralization

1.8 Decentralized decision-making

1.9 Decentralization of Responsibilities

2. The center where the Bitcoin system still exists

2.1 Program maintenance exists the center

2.2 Bookkeeping exists the center

2.3 There is an intermediary in the transaction process

3. Most of the blockchain projects cannot reach the level of decentralization of the Bitcoin system

written in the back

After the publication of chapters 1-15 of “Invite Satoshi Nakamoto to usher in the new world,” there was no debate about finding Satoshi Nakamoto, but many readers questioned and did not understand the discussion about the Bitcoin standard in chapters 11-13. Chapters 11-13 are all about the summary and conclusion of the Bitcoin standard, which requires a good background in economics, finance, stocks, products, marketing, and blockchain to understand. To this end, I focused on supplementing the content of economics and finance through question-and-answer methods, with a total of 10 questions. For financial professionals, the “Basic Concepts of Bitcoin” discussion supplements the part of Bitcoin and blockchain. Bitcoin and blockchain have concepts without a theoretical system, and the concepts used have different understandings, so it is necessary to sort out and continuously improve. The basic theory of Bitcoin written in 5 sections already. According to the requirements of readers, the concepts starting from this section are not limited to the idea of Bitcoin standard, and the related concepts of Bitcoin and blockchain will be discussed more extensively.

1. What is the decentralization of the Bitcoin system?

1.1 Transactions out of the bank

There is no need to go through the bank as a third party. The bank as an intermediary party is removed. But there is also a third party, and this third party is the party that keeps the books. How can the accounting party not cheat? Guaranteed by program design. There are still minor problems; see 2.3.

1.2 General ledger decontrol

The program design ensures that the ledger is decontrolled. No computing power can modify the program. No single party controls the ledger. It is important is one of the correct answers to Bitcoin decentralization.

1.3 Decentralized storage structure

No centralized scheduling for Bitcoin storage exists, and anyone can join and quit.

1.4 Decentralized general ledger bookkeeping rights

Only the winner of the proof-of-work competition gets the right to bookkeeping. That is, the computing power is decentralized.

1.5 Decentralized account verification

Bookkeepers are responsible for verifying blocks; six blocks are confirmed as valid. Do you know who the next verifier is?

1.6 Issuing coins no the center

The Bitcoin system does not have a unified currency issuing institution.

1.7 Management Decentralization

No unified management agency relies on community consultation, but it is not suitable for complex projects.

1.8 Decentralized decision-making

The Bitcoin system has no founder intervention and relies on community governance, which is necessary for mature blockchain projects. But there are central points in the community. The consultation mechanism and voting mechanism of community governance are not perfect.

1.9 Decentralized Responsibilities

Control of your own money and your risks. It is a trade-off between pros and cons.

2. The center where the Bitcoin system still exists

2.1 Program maintenance exists in the center

Wladimir Van Der Laan is the third chief maintainer of the Bitcoin system and the central point of the Bitcoin system. He retires in August 2022 with no designated lead maintainer. How to do it in detail has not been disclosed in detail. It is speculated that a group of people may be responsible. This group of people is the center. So decentralization does not remove programmers. Of course, the developers are not limited to the VanderLan team, but their programs account for more than 96% of the market.

2.2 Bookkeeping exists in the center

Accounts must be recorded on the longest chain. The longest chain is the center. Mathematically speaking, the ledger is not centralized, and mathematics is not complete. That is, there is no guarantee that it will not be missed. It is also controversial, as Bitcoin forks the chain in the event of a failure. But when troubleshooting, it is still necessary to return to the most extended chain principle. Other nodes without accounting rights copy the confirmed blocks to their nodes, just as cloud backup cannot be considered decentralized.

2.3 There is an intermediary in the transaction process

Miners bookkeeping is a third party. The bookkeeper replaces the intermediary of the bank. Where there is a third party, the power of the third party exists. But not as powerful as banks. When the accounting becomes blocked, whoever gives more transaction fees will be credited. It is a defect that bank bookkeeping does not have.

3. Most of the blockchain projects cannot reach the level of decentralization of the Bitcoin system

The Bitcoin system uses computing power as an intermediary for bookkeeping, replacing banks, but the power is different. The Bitcoin system is a centralized ledger.

The use of blockchain ledgers cannot simply be regarded as a decentralized project. Compare carefully with the above criteria. Centralization and decentralization are not accurate refinements of the concept of Bitcoin. In Satoshi Nakamoto’s white paper, Wei Dai’s sentence “the account book is made public” is the first citation of the white paper. This sentence is the accurate distillation of the concept of the Bitcoin system. Bitcoin decentralization is the understanding of later generations. In Satoshi Nakamoto’s white paper, where did you see the statement that the Bitcoin system is decentralized?

Complete decentralization does not exist.

The basic concept is not accurate; how to build a blockchain building?

written in the back

This series provides the conceptual explanations and summaries needed to read chapters 10-13 of the article “Invite Satoshi Nakamoto to welcome the new world” and the previous article Q&A 1-10.

1. Full-text links

This article was published in Bitui Serial.

Chinese link:

https://www.bitpush.news/articles/tag/%E8%AF%B7%E5%87%BA%E4%B8%AD%E6%9C%AC%E8%81%AA

English link: https://en.bitpush.news/?s=Weisha+Zhu

2. Supplementary video explanation (over the wall in China)

This series of articles has been explained on Sun TV, and the articles and TV explanations are complementary.

The TV show is the interpretation of the point of the article. Broadcast schedule: The broadcast schedule is as follows:

Every 1, 3, and 5, Beijing time noon.

Sun TV’s link is as follows:

The whole program is divided into two parts. The first part proves who Satoshi Nakamoto is, and the second part is about the Bitcoin standard. The program will continue, followed by discussions and Q&A, hoping to form a Bitcoin-based theoretical system. Users are welcome to leave messages in the TV comment area, and viewers will be selected to participate in the conversation.

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