The term decentralization has become synonymous with blockchain in the cryptoverse. Thanks to the blockchain technology, people can work on a leveled playing field. Information can be distributed around the world to countless numbers of computers. Banks and other commercial institutions have benefited from decentralization a great deal as it paves a way for a world of security and privacy.
The Ethereum blockchain is far more decentralized blockchain than Bitcoin. However, there has been a debate about the true decentralized nature of Ethereum. Some within the cryptocurrency community claim that Ethereum is not as decentralized as it appears. Below are some things you need to know about Ethereum’s decentralization:
1. Is Ethereum is Not Attack-proof
The factors that make a network decentralized need to work together for the network to remain decentralized. These factors are what make up the foundation of the network, and they include, fault tolerance, attack resistance, and, collision resistance. If anyone of these factors is bridged, the system will become centralized.
2. The Ethereum Blockchain Isn’t Error Resistant
Developers are still not in consensus regarding the true meaning of decentralization. Vitalik Buterin developed three classifications for determining the centralized nature of a system. They are architectural, political and logical. Each class is related to the other. Errors can occur if the relationship between them is disrupted.
3. Pool Collusion is Possible
Solo mining isn’t common these days. Miners prefer to combine resources with other miners and share the profits. This threatens the decentralized nature of Ethereum. The larger mining operators can add generated blocks for specific transactions they feel like processing. The most popular pools control about 60 to 70% or the hashrate. This isn’t just an Ethereum problem but a problem in any cryptocurrency that has grown too complex for solo mining to be beneficial.
Decentralization is still an integral part of cryptocurrencies. However, many flaws need to be fixed if the Ethereum blockchain is to be genuinely decentralized. Until all the factors that can give way to centralization are eliminated, then the platform cannot be 100% decentralized.