Welcome to BitBoy Crypto!
My name is Ben.
Today, we're going to be talking about the idea of centralization versus decentralization.
Now, a lot of this information we're going to be covering in this video
comes from an article that was posted on Medium from Vitalik Buterin back in 2017.
This was really probably the article that kicked off this debate
of centralization versus decentralization.
So it's important to remember, and I tell you, guys, all the time,
this is a continuum here with a zero line, okay?
Something can be more decentralized,
or something can be more centralized,
but you're never going to have anything that's completely centralized
or completely decentralized.
All your projects are going to fall somewhere on this continuum.
You look at a project like Ethereum,
and, well, Ethereum's probably about right here on decentralization.
You look at something like Solana,
the blockchain can be paused,
it's probably here, okay?
You probably got Solana here.
You got Ethereum here.
You've got--
Cardano is probably over here.
Cardano is probably the most decentralized, to be honest with you, guys,
So it's going to fall over there.
Then you-- well, of course, then you have Bitcoin,
which is over here, of course.
I mean, Bitcoin, I'm talking about out of altcoins and layer 1 networks.
Then you look at things that are super centralized.
Over here, you know, you'll have something like a CBDC.
Of course, you know, our governments are, you know, centralized to an extent,
yada, yada, yada.
So in a world of decentralization and centralization,
you have something that is centralized,
you have something that is decentralized,
and then you also have what we call distributed networks.
These are all a little bit different.
So just so you guys kind of understand a visual for this,
I'll show you what these kind of look like.
So you got something that's centralized,
you're going to have something that's one point of control right here in the middle,
and then you're going to have all of these arrows coming off of it, okay?
Everything is centralized.
Everything operates basically around this one central entity.
So, you guys see how this kind of works?
Everything that happens in this network is coming from this bottom part.
So, what does that mean?
That means that if you cross out this middle part right here,
the entire thing fails, okay?
So that's called centralization.
Something that is decentralized,
you're still probably going to start out at one point,
but it's going to build off into all these systems
that actually have their own infrastructure here, okay?
It's going to look kind of like this.
Everything has got something coming off of it.
And then, like, from here,
you may have, like, almost one little centralized area of this decentralized project.
What makes blockchain so cool, when you think about this,
is that it doesn't matter-- there's no point on this entire chart that could fail,
that would affect the rest, okay?
And what I mean by that,
it doesn't matter if this here, you know, gets shut-- let's just say shut down.
If this node here shuts down on the network,
it doesn't matter.
Because even though you got all these other ones coming off of it,
it connects back here.
It connects here.
And then this here has all these different connections.
To really shut down something that's decentralized,
you've got to shut down every single node at one time
to be able to stop it from running.
Then you have distributed networks.
These kind of look more like a net, almost, I guess.
I mean, you can kind of think of, like, almost like the IOTA Tangle, maybe,
something like that.
That might be a good example.
It's almost like a net, is the way it looks like.
And so each one of these is a point, but they all connect to each other.
Everything connects here on this.
And then this, we continue all the way down.
Okay. So when it comes to decentralization, you've got three types.
You're going to have architectural,
you're going to have political,
and then you're going to have logical.
Now, the one of these that you're going to probably have the most centralization
within decentralization is the logical one.
We'll get into that in just a second.
So architectural is pretty obvious, right?
That's what we just drew on the board.
This is the system.
How is the system set up?
How is the architecture set up
so that if one node fails, how does it affect the rest?
Then you have political.
This has to do with control.
Who is in charge of this network?
So you look at Solana, for instance.
Well, the developers behind Solana, they're still in charge!
They can hit pause on the blockchain,
where you compare it to something like Ethereum,
they can't.
Things have got to get voted in on the Ethereum world through governance.
So this is where your governance comes into play.
Obviously, Bitcoin as well has governance.
Then you have logical.
This is basically a little harder to understand exactly what this is.
But this basically has having to do with interface and data structures.
So when you think about data structures,
if you look at, like, let's talk about Fireblocks from Ethereum,
Fireblocks is kind of a third party company
that manages a lot of the stuff that happens on the Ethereum network.
So if Fireblocks went out with this data structure,
it would affect a lot of stuff in crypto.
We've actually seen, I think, an instance of where you had one of these third party companies
go under or mess up, go offline, and affected nodes everywhere.
Think about Amazon Web Services.
Okay? For instance.
If all the Ethereum nodes in their websites are using Amazon Web Services to host them,
well, then that's actually a place on the data structure where it is centralized.
So one of the most centralized things that exists are corporations.
If you look at a corporation,
in general, its architecture is centralized.
Its governance is centralized, CEO, board, whatever the case may be.
And then it's, of course, logically centralized as well.
You look at something like the way that we vote here in America or civil law.
Well, the architecture is certainly centralized, you know?
Like, the way that votes are controlled,
or the way the voting machines are controlled.
I mean, if that was not more clear in the last election,
don't know how to say it.
It's centralized.
There are entities that make decisions on the way that those systems are set up.
However, politically, if you trust the system,
politically, it is not centralized. Why?
Because the people that are voting for things in the United States,
they're all across the United States.
And then, of course, we also have the way that even the governance works
with the electoral college system.
It also is decentralized.
But if you look, once again, at the data structures
and the way that voting tallies are held and everything like that for elections,
then you can say obviously that that's centralized as well.
When it comes to something that's decentralized, for instance,
something that's naturally decentralized is language, right?
The way that we communicate with each other.
I can't go to Portugal if I don't know Portuguese and speak to someone in Portuguese.
They can't communicate with me.
There are ways you can communicate, but not through language.
It's naturally decentralized.
Each individual language is siloed off from every other individual language.
When you think about blockchains, for instance,
when it comes to blockchain,
you're going to have them where they're, for the most part, architecturally decentralized,
politically decentralized,
but yet, logically, a lot of them are still centralized
because they rely on a lot of this interface and data structure, you know, architecture.
Okay. So when it comes to blockchain,
why do we want to see things more decentralized than centralized?
Okay?
Three reasons according to Vitalik Buterin.
You have fault tolerance,
you have attack resistance,
and, of course, you have collusion resistance,
which is key here.
Okay. So, what do we mean by fault tolerance?
Okay?
When we talk about fault tolerance,
you may have heard that term a lot,
what we're actually saying is,
it cannot be accidentally shut down, right?
There is no--
there's no one place in the architecture of the blockchain
to where something can happen,
there's one little bug in the code, whatever it is,
and everything gets completely shut down.
So when you hear fault tolerance,
you should really be thinking about, like,
it's not going to accidentally go offline.
It's designed in a way to keep it running.
Of course, then you have attack resistance.
These are hacks.
You don't want to have one central point of control.
You don't want one point of control.
You don't want a hacker to be able to attack one node on your system
and shut the entire thing down.
And, of course, we have collusion resistance.
Now, collusion resistance, this kind of has to do with governance, in a sense.
What you don't want, right?
Is you don't want one person or group controlling the outcome.
So you don't want--
like, that's why with Ethereum, for instance,
they have these proposals,
and then those proposals, people vote for them.
Because the community has to be able to vote.
The community has to be able to give their input.
We don't want Vitalik Buterin deciding,
"You know what? Let's go and burn a bunch of Ethereum."
So when you look at some projects, like Stellar, for instance,
they did a gigantic burn without asking anybody or doing any governance.
That means they're going to fall more on the less decentralized part of the scale
than the more decentralized scale.
So, to me, I think all this is super important for you guys to understand.
Like, we talked about decentralization a lot,
but I think a lot of people don't really understand it.
And I actually read this article from Vitalik back when it first came out,
and this is what really gave me a good--
you guys can look it up.
Just look up "What is decentralization? Vitalik Buterin."
The Medium article should, you know, come right up.
But when you look at this article, it really drives home
why this is a far superior system for mankind than a centralized system.
Cores and corporations are going to still need to be mostly centralized.
But maybe one day, we'll see that change with DAOs,
or decentralized autonomous organizations.
But decentralization is something that's key to me
and the reason why I held on to this idea of blockchain for so long.
Because decentralization,
it solves a lot of our problems
when we look at the technocracy,
when you look at Amazon, Google, Facebook trying to take over everything.
We don't want that. They can get that out of here.
We want our government to act in a more decentralized way.
We want our money to be decentralized.
You know, we want our systems to be decentralized.
And we certainly want our crypto and our blockchain to be decentralized.
So I hope you guys got a lot out of this video.
That's all I got.
Be blessed.
BitBoy out.