‘Decentralisation’ is perhaps the most common buzzword associated with blockchain technology and Bitcoin. And yet, the definition and implications of the word are hotly disputed. Take, for example, the following two statements:

"In order for a crypto to be truly decentralised we can’t know the creator, even in our lives we only truly feel free as we don't know our creator/s.

This is the reality of life.

Whoever created Bitcoin made it for a reason and its us who have to made his/her vision a reality."

Crypto Beast

 

"Decentralisation is the god they worship and leaders of rival cryptocurrencies are demonic single points of failure that should be struck down for 'scamming innocent people' by promoting alternative implementations."

Kevin Pham

The majority of the cryptocurrency media are rallied behind the notion that decentralisation is the be-all and end-all of Bitcoin, that it’s disruptive because it’s decentralised, and that centralisation would make the system inefficient.

We believe the opposite is true: Bitcoin is efficient because it’s the most centralised system, and it’s disruptive because it’s transparent and distributed.

If the above statement sounds like crazy-talk to you, it could be that your definition of decentralisation has been hijacked. 

The Meaning of Decentralisation

When Satoshi used the term ‘decentralised’ to describe the Bitcoin network, he used it in a particular context to illustrate its meaning.

Though the term is used in later communications, the fact of the matter is that it’s not used in the whitepaper. Instead, the whitepaper talks about a distributed network:

“...we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions.” - Satoshi Nakamoto, via P2P Foundation

When the term ‘decentralised’ is used, it’s used in a particular context:

“It's completely decentralised, with no central server or trusted parties, because everything is based on crypto proof instead of trust.”

 

The context of the above statement indicates that decentralisation has to do with getting rid of a central point of control, which would eliminate the potential of a central point of failure

What, then, are the checkboxes that a cryptocurrency has to tick off in order to qualify as decentralised?

Bitcoin’s Decentralisation Applies to its Locus of Power and Control

Blockchain Scientist and creator of Bitcoin, Craig Wright illustrates how the centralisation of power can be prevented by establishing a blockchain with some simple, yet steadfast criteria in place:

 

“For a cryptocurrency to be decentralised, it needs to be set in stone.

The same does not apply to just Bitcoin. Any cryptographic asset that can be altered by the protocol developers to change the nature of transactions such that it could alter the format making a transaction signed today become invalid some time within the next 20 years is centralised. 

Creating something that is decentralised is very simple; you need to launch a cryptocurrency in such a way:

  1. Create a set fixed protocol.
  2. Allow no pre-mines or special benefits outside of time for the creator and other investors.
  3. Start the system with no value that is intrinsic in the system.
  4. Allow individuals to earn in securing the network and validating transactions.”

Bitcoin Core’s Capture of Bitcoin

The title of this blog makes a pretty bold statement, so let’s address the elephant in the room. 

Why do we talk of the hijacking or capture of Bitcoin and the term ‘decentralisation’? Shouldn’t we just allow for different interpretations of Satoshi’s use of the term? And what does it really matter?

Though our postmodernist era seems to insist on the relativism of truth, don’t be fooled - the implications of distorting the meaning of Bitcoin’s decentralisation are huge! 

Think about it: the heart of the matter is to decentralise power to avoid the manipulation of Bitcoin’s protocol and protect the integrity of the ledger’s data. But, the very parties that insist that decentralisation requires keeping Bitcoin’s block size small enough to allow even hobbyists to run a node (their idea of decentralisation), support a system where developers are granted the power to make protocol-altering decisions.

See the bait and switch? We TAKE the power, but we GIVE you a false notion of decentralisation.

No, thank you, we say! (Which is why we are firm supporters of Bitcoin SV which has locked in the original Bitcoin protocol and basta with politics!)

Given the ramifications of this sleight of hand, it’s hard to believe that we’re dealing with a misunderstanding instead of a coup. Packing power behind this theory, Deryk Makgill recently dug through Bitcoin archives to dig up the following bits indicating how a shadow figure has been pulling the strings:

 

 

How Bitcoin is the Most Centralised Data Ledger - And Why That’s GREAT

“Once people actually realise what centralisation of a distributed system looks like, they’ll understand it’s the most beautiful thing that we have on the planet.” - Michael Hudson, Bitstocks CEO-Founder

 

Now for the other elephant in the room. How dare we call Bitcoin a centralised system, and pronounce it ‘good’?

Well, in this case, centralisation is meant in the context of the nature of the data system, instead of the locus of control. Let me explain.

Think of how our existing information systems are centralised and its impact on the supply chain: each company has its own ledger that exists in a silo. If that company has to communicate sales orders or stock count with another agency, it requires complex integrations. And still a good chance that miscommunication results in incorrect billing, delivery, and even fraud that goes unnoticed between all the crossed lines.

In the case of large or multi-national corporations, each department might even have a separate data ledger. In such a scenario, huge amounts of funds can sit idly in one corner of the corporate structure, while an interest-bearing faction remains blissfully unaware of the loss of potential income (based on a true story). 

The same applies to data collection companies each of them with their own data set, limiting the potential for data research. Should it be necessary to expand a data set, the organisation would have to buy in more data from outside of the system. The integrity of data imported from outside the system would be very difficult to verify. And, as data scientists say, the only thing worse than no data, is bad data!

In contrast to these systems, Bitcoin’s data ledger provides the opportunity for organisations (internally, and across supply chains) to centralise their data storage on a single backbone, and simply grant or revoke access permissions as needed. Every bit of data recorded is stamped with its provenance, allowing verification of the source at any time in the future.

Bitcoin as Global Database Ledger

If you understand Bitcoin for its data pooling capacity and the potential for utilising that data pool for AI research, you’ll see the huge benefits of integrating all data systems into a single global ledger.

For an example of how this would work in the real world, check out Seafood Chain’s Blockchain ERP integration system:


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