Since the earliest days of cryptocurrency, decentralization has been key to its value proposition. The idea that no one governing body has control over the decisions or direction for which the entire whole operates.
Instead all functions, power, and authority are distributed among all to ensure consensus, redundancy, security, and to combat corruption - but... can the system ever be fully decentralized?
The appeal of a non-regulated technology/currency controlled by the people who hold it has helped cryptocurrencies continue to thrive over the past several years.
Bitcoin, the very first cryptocurrency, has shown that decentralization not optimal for every possible use case.
It has shown that in it's infancy, it can be incredibly inefficient compared to centralized solutions and as a result, can be slow to adapt or address these issues due to a non-consensus of it's share holder.
When it comes to transaction throughput, Bitcoin, which was supposed to be cheaper and faster, struggles to compete with centralized payment networks like Mastercard and Visa.
Bitcoin struggles with efficiency in transaction throughput, power consumption, and overall pace of development.
It however remains to be the primary currency for which all others are linked to. The struggles with Bitcoin show in part why digital currencies can never be fully decentralized.
Other currencies have emerged which try to fill the gaps where Bitcoin has challenges.
Some, such as Ethereum have come close, but still have challenges of their own, such as it's continuously increasing blockchain size.
In it's infancy, the network for Ethereum is growing and continues to increase per month - if ETH transactions start to reach the level of Bitcoin transactions, the size will be more demanding than the amount of storage space that the average person has available.
The speed for which the network is growing is a concern because of Ethereum's faster block times, making them generate more blocks in less time. Already we are seeing large sync times for local wallets and nodes - which are needed to secure the network.
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As the size continues to grow, you may see less people hosting full nodes, leaving that job to larger corporations.
For the 2 examples listed above, some sort of centralization needs to happen in order to maintain the health of the entire network. Full control and regulation will still be distributed, however some form of centralization will happen giving some party more influence then others.
In the end, innovation will continue, new ideas will emerge, new industries will enter the space, and all of this will pave the way for a more free and prosperous future for all.
At the same time, the government will continue to try and regulate and force some kind of centralization in order to exert a bit of control before the technology becomes more legitimate and mainstream.
Can Cryptocurrencies really be fully decentralized?
For me the answer is eventually YES, but for now some form of centralization needs to occur in order to preserve and protect what has already been achieved.
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