Digital Cash


Why is decentralization hard?

Decentralized is not a familiar term for many people. Here’s a simple analogy to help explain what it means and why it’s a complex problem to solve.

Imagine you join a commune, say of 90 people. You’re all going to live by your shared community rules and no one will be in charge. This means there’s no one person or no group of people who can exert power over anyone else, kick them out, or limit what they are allowed to do. Everyone must live by the agreed rules and in return, they have the same power and influence as everyone else. But it also means there is no one in charge to go to, to alter the rules or how they are enforced if a dispute or problem occurs.

All the decisions you make and all of the day-to-day operations of the commune can only be guided by the rules you’ve all agreed to when you joined.

All goes well, you’re all there for the same reasons and want similar things and by and large are happy.

One day, 10 new people appear and join your commune. They agree to the same rules so they are allowed in, just as you were. However, these people aren’t the same as the rest of you. 5 of them are secretly from a neighbouring commune and want to disrupt and destroy yours. The other 5 are criminals and want to steal from your commune and its members.

Did the creators of your commune manage to get the rules right? In the same way as did the designers of your decentralized blockchain manage to get all of the critical parts of its design absolutely right.

Not pretty much right, but every single one perfectly right?

That’s the important thing here, the important thing always with security, it needs to be absolutely bulletproof 100% right. It doesn’t matter if they managed to get it 99.9% right. If there is just one exploit that can be found, just that 0.1%, that’s all a malicious person needs. They will devote all their resources, all their talent and technical know-how, searching for that one vulnerability which got overlooked when the rules were created, that lets them work around what was intended and instead accomplish their malicious aim.

The reward for them if they can find it is great. They then get to exploit the weakness they have found without the community realising or the rules stopping them.

That’s why building decentralized systems, like good blockchains, is so hard. But it’s a challenge worth solving because when accomplished it’s something the world has never seen before – a system that is fair to all, with equal rights for all.

Other blockchains

Blockchain communities have a lot of arguments about decentralization. Even just defining what a decentralized blockchain means! The reason? A lot of blockchains have skipped the problem, found it too hard to solve, or it got in the way of their creator’s desire to move fast, release fast, be first. So members of their blockchain communities tend to fudge what decentralization means to suit the limited version their favoured blockchains have managed to achieve.

The Cardano Foundation has partnered up with the University of Edinburgh and is currently funding the creation of The Edinburgh Decentralization Index. This university-based research will formally define what decentralization means so that a common set of criteria can be created and a score then produced according to how well each different blockchain meets the ideal requirements. This is typical of Cardano – its creators don’t just make bold claims, they spend time, effort and money having them proved by academics and scientists.


Leave a Reply

Your email address will not be published. Required fields are marked *