HomeCoinsQTUM (QTUM)Qtum Decentralization. Decentralization is one of the core… | by Qtum |...

Qtum Decentralization. Decentralization is one of the core… | by Qtum | Oct, 2021

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In his CypherPunk Manifesto of 1993, Eric Hughes wrote that “if privacy is given from a stronger body to a weaker subject, it is no longer an inviolable right. It is something that is merely given and is, therefore, something that can be taken back.” This is why the cypherpunk movement was a major proponent of using anonymous and decentralized currency systems free from state interference.

How can we ensure that the system will work accurately even if many nodes in the network turn malicious or perform sub-optimally? This problem is known as the “Byzantine Generals’ Problem.”

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An army has surrounded the enemy’s castle. The castle is very well-fortified, and it will require a coordinated attack from the army to take it down. However, some of the generals are corrupt. They plan on retreating instead of attacking to make sure that the castle defeats the army. Now, how will the army make sure that it succeeds in attacking despite these malicious elements?

This is the Byzantine Generals’ Problem. In a decentralized currency network, not solving this problem could lead to an event known as “double-spending.” Double-spending is a flaw in a digital cash system wherein the same token can be spent more than once. So, how did Satoshi Nakamoto solve this problem for Bitcoin? The answer… proof-of-work.

To understand this, let’s see how PoW, aka mining, works.

● People from all over the world can be miners as long as they have the proper mining equipment or are part of a pool.

● The miners use their computing resources to solve cryptographically challenging puzzles continuously.

● The moment a miner successfully solves the puzzle, they get to add their block to the blockchain.

The main thing here is that solving these puzzles is extremely work-intensive and requires a lot of resource wastage. Now, if a malicious miner plans to mine their blocks and fork the chain, they will need to waste a lot of resources, which could be out of their financial means.

As such, the Nakamoto consensus mechanism ensures that a decentralized system works in a decentralized manner without depending on the goodwill of the participants.

In 2017, during the ICO craze, scalability became all the rage. During that time we saw the rise of several projects, who preferred to prioritize speed by centralizing their blockchain. The core mechanism behind their consensus algorithms looked something like this:

● Instead of the entire network participating in the consensus, the network chooses/elects certain leaders or delegates.

● These delegates are responsible for the consensus process.

Since the number of nodes involved in consensus is lower, it’s much faster than the traditional Nakamoto consensus. However, we have a major centralization issue with this approach.

Test #1: Few nodes have too much power

Test #2: Do newcomers have any chance of making a significant impact?

This could be highly problematic since early investors will always vote for newer proposals and general governance.

Test #3: How much power does the core team have?

As things stand, Qtum, Ethereum, Bitcoin are some of the handful of protocols that are still fully decentralized. Qtum’s unique ability to adjust blockchain parameters without a hard fork allows scaling to take place as the situation requires. For example, the native blockchain is capable of handling up to ~1100 transactions per second. Segregated Witness can theoretically expand this by 60%, bringing the native total to around 1600. This is a tad deceiving, as every transaction would have to make use of SegWit, but it’s possible. At the time of this writing, it’s about USD $0.06 to send a Qtum transaction, so it’s not likely to get out of hand to the point where transactions cost hundreds of dollars anytime soon. If this were to occur, Qtum has implemented “Lightning Network”, a second layer scaling solution. Their website advertises:

“Scalability. Capable of millions to billions of transactions per second across the network. Capacity blows away legacy payment rails by many orders of magnitude. Attaching payment per action/click is now possible without custodians.” Lightning Network

While our implementation of Lightning may not be as established as Bitcoin’s, the foundation is there if required. To sum things up, centralization of a blockchain is simply not required in order to achieve a high throughput. Projects can retain censorship resistance and community governance in a trustless state while providing the speed necessary to build the future of finance.

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“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel

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