bitcoin's value proposition is based on its ability to resist any type of censorship. Without that feature, bitcoin loses its power to challenge and resist any authority that wants to subjugate bitcoin to the same rules that apply in the traditional world. With this in mind, it is critical that bitcoin does not have any central point of failure. If there is a gatekeeper, there is a vulnerability. If there is a vulnerability, it will be exploited. And at that point, bitcoin as an exercise in free, decentralized digital money simply stops.
To guarantee the decentralization, robustness and antifragility of the network, we need to maintain the same components that assure us, through time-tested battles, these same properties. No entity in the world can feel that attacking bitcoin will be a successful endeavor. The best way to do this is to spread bitcoin as much as possible to all corners of the world by running nodes. Like a monetary virus. The more it spreads, the greater the chances of success.
Satoshi mentioned several times that all previous e-money projects failed due to their centralization features. A monopoly over the money supply is a power that governments and the financial system will not easily give up. To ensure that no bad actors stop bitcoin, it is our duty to ensure that bitcoin decentralization increases all the time. Forever.
Many people automatically dismiss electronic currency as a lost cause because of all the companies that have failed since the 1990s. I hope it's obvious that it was just the centrally controlled nature of those systems that doomed them. I think this is the first time we've tried a decentralized and non-trust based system.
bitcoin open source implementation of P2P currency
https://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currencyhttps://www.indianapolismonthly.com/news-and-opinion/business/mad-money/
If we take a close look at what bitcoin has achieved so far and where it is now as a global network, it is a fact that the network is very decentralized. However, just as it can be argued that bitcoin's purchasing power is uncapped, bitcoin's level of decentralization is also uncapped. The more the better! Beyond a certain level of decentralization, any attack on bitcoin is not only useless to the attacker, but also harmful, since the attacker's failure ends up reinforcing bitcoin's ability to resist any attack, strengthening the network in the process, by time that decreases the perception of success of any attack. attempt to attack bitcoin. Antifragility in its purest form!
Hydra: mythological figure from the Book of Revelations. Every time one of the heads was cut off, the Hydra would grow two heads again. Every time they attacked the Hydra, the Hydra grew stronger. The Hydra is antifragile. bitcoin is a monetary hydra.
What is the level of decentralization that ensures that any potential attacker is completely disincentivized from attacking the network? Nobody knows for sure. We can only estimate it. However, the best strategy is to simply decentralize bitcoin as much as possible. And the most important tool we have at our disposal is to run as many nodes as possible around the world.
Nodes fill one of the most important, if not the most important, roles in bitcoin. Following the rules of the protocol, they verify and validate all transactions and all blocks that propagate through the network. They also transmit all this information to other nodes and store all the blocks published by the miners. If a transaction, block, or other information violates the protocol's consensus rules, the nodes automatically reject it. Nodes are essentially the arbiters of the bitcoin game, making sure everyone plays fair like they're supposed to.
bitcoin nodes working
If more nodes join the network, more arbitrators will be verifying everything that happens in bitcoin. If more nodes join the network, there will be more copies of the entire blockchain. If more nodes join the network, there will be more guarantees that each actor behaves as it should. Every time a node joins the bitcoin network, anyone who wants to attack it will have to cut off an extra head to kill this monetary Hydra called bitcoin. If you're not running a node yet, it's time to do your part.
Unfortunately, and unbeknownst to most bitcoin users, the vast majority of miners No run a node today. Providing valid shares to the pool operator is all that is needed to receive payment for your work. It is commonly said that the network pays miners to protect it against all adversary attacks by building an energy wall so dense that it is impossible to penetrate. However, if we want to continue with this analogy, what we observe is that the miners are employees of the pools, not of the bitcoin network. There is no direct connection between the miners and the network. Miners are effectively selling computing power in the form of hashrate to pools. The responsibility of selecting the transactions that go into the block, creating the blocks themselves, propagating said blocks found throughout the network and receiving all the necessary information is delegated to the groups. This effectively means that Pools are the ones censoring, or not, the network and therefore undermining Satoshi's original vision of an open, permissionless protocol for the transfer of value.
Furthermore, if the level of decentralization had not been reduced enough just by that, there are proxy groups. Proxy groups are basically a wolf in sheep's clothing. The same pool, but a different brand. This means that if a large group A has 20% of the hashrate, but 3 smaller groups B, C and D have 5% each, effectively group A controls 35% of the hashrate. That would be enough to carry out a Selfish Mining attack and damage the network. Therefore, what we end up with is just a couple of “master” cluster nodes that decide which transactions make it to the blockchain. This situation does not seem very decentralized. That's because it isn't. Fortunately, there is a way to fix this problem. It's called Stratum V2.
Stratum V2 is a new mining protocol that hopes to bring a number of new features that make bitcoin mining safer, more efficient and of course, more decentralized. Its reference open source implementation was developed by an independent community of more than 15 developers over the past three years, and battle-tested with more than 30,000 downstream. With this new protocol, bitcoin decentralization can reach new heights. How?, you ask. Giving miners the ability to create their own block templates and choose which transactions are included in the blocks. To have this capability, miners must run a node. More nodes means a more decentralized and robust network. Once all miners are the ones building blocks instead of pools, we will finally be able to witness bitcoin take another step towards invincible decentralization.
DEMAND pool is the first mining pool to implement the reference implementation of the Stratum V2 protocol. Our mission is, above all, to contribute to the decentralization of the network and end the threat of censorship on bitcoin. If you are a miner and want to be in the driver's seat, consider joining our group. Special lifetime conditions and other features will be available to founding members of our group.
It's time to improve bitcoin decentralization. You come?
This is a guest post by francisco monteiro. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
