Decentralization is the essence of blockchain

I recently read Mr. Bai Shuo's thoughts on blockchain and was touched. As the popularity of blockchain continues to increase, the related attention and discussion are also increasing. The following is my own experience to share with you.

1. Decentralization is the product of a non-trust mechanism

When it comes to blockchain technology, we need to go back to the birthplace of blockchain, that is, the emergence of Bitcoin. In Satoshi Nakamoto's paper, Bitcoin initially tried to solve the problem of multiple payments or double payments, that is, the problem of "double spending", that is, a sum of money is spent more than once. In the face of the "double spending" problem, the solution of the traditional system is to rely on a set of authorization mechanisms (centralized authority) to manage and authorize each transfer and transaction layer by layer. You can see this in the current banking system.

The centralized authorization mechanism is a trust mechanism, which means that managers are assumed to be responsible and perfect. I will not elaborate on the problems that may occur here. However, the Bitcoin designed by Satoshi Nakamoto adopts a different approach. It uses a consensus between nodes, that is, a completely non-trust mechanism to solve the problem. When a transaction is confirmed by more and more nodes, the risk of "double spending" is infinitely close to zero. In the non-trust mechanism, every node is equal and there is no privilege. The magical thing is that after enough nodes confirm the ledger transaction, the credit value of the Bitcoin system itself is generated. Starting from the starting point of the non-trust mechanism, Satoshi Nakamoto or Bitcoin inadvertently interprets a realization of the originally relatively empty decentralized idea.

In Satoshi Nakamoto's paper, blockchain technology is actually the specific implementation of this non-trust mechanism electronic cash system. Blockchain is essentially a combination of some technologies, including asymmetric encryption, peer-to-peer network and block chain data structure. From a collective perspective, decentralization is a superset of non-trust mechanism, and non-trust mechanism is a superset of blockchain technology.

2. Maximum gaming is a manifestation of decentralization

Gaming is very important and necessary in a non-trust mechanism. Take Bitcoin as an example. There is a continuous dynamic gaming environment among users, miners and developers. The mining POW mechanism is used to incentivize miners to maintain the system and record transactions. The open source community is used to supervise and regulate the development and updates of developers. Voluntary transaction fees are used to allow users to use the Bitcoin platform more effectively. Bitcoin has never thought about becoming a world bank. As a network electronic cash system with a spirit of disruptive innovation, its main purpose has been achieved. Its insufficient network and processing performance are not the main point.

Mr. Bai Shuo mentioned that the view that the blockchain is a trinity of platform + digital currency + community in the "币圈" is just a way of expression, not the essence. In my opinion, the situation of the "coin circle" and the "chain circle" objectively exists. The difference is whether equal game is recognized, that is, there is no privilege structure. If there is a privilege structure, even a little power at the beginning will affect the game structure, causing the whole system to change, and thus step by step towards the old path of centralized control. Because people always tend to use power to achieve faster and more efficient results, regardless of the motivation.

From this perspective, recognizing the trinity of platform + digital assets (tokens) + community is a natural development under an equal game system. Emphasizing the centralized elements in the blockchain, namely privileges, can be dangerous. Because when responsibilities are not clear, privileges are often associated with interests and cannot be constrained. The failure of the DAO project was actually the result of participants selectively evading the responsibilities of "responsibilities, rights and interests", blurring the rights, and excessively pursuing profits.

Regarding Mr. Bai Shuo's point that the "链圈" has no burden for introducing centralized elements into the blockchain technology system, I personally hold a cautiously optimistic attitude. Most of the "chain circle" regards blockchain technology as a tool. If it is only used as a tool, does it still fall into the scope of blockchain application? This is worth thinking about. In my opinion, the possible burden of the "chain circle" is to over-exaggerate the technical characteristics of blockchain and smart contracts, and not pay much attention to the decentralized nature of the blockchain application model. The tool characteristics of blockchain should be its broad definition. The blockchain application that combines the decentralized, open, equal and game characteristics of the non-trust mechanism should be its narrow definition.

3. Blockchain is an open scenario application

Obviously, if we recognize that the blockchain system is a decentralized, trustless, game-based system, the resulting application should be an application based on an open scenario. To be more specific, the first is openness at the data level, and the second is openness at the consensus level. The real charm of blockchain technology is the open network-wide data storage and processing capabilities based on a consensus mechanism under the decentralized idea. Basically, both consortium chains and private chains involve a certain degree of non-openness of data and consensus, which is the result of the introduction of privileges, and its further impact remains to be seen.

I have to mention Bitcoin again. From a certain perspective, it is the first example of blockchain application. Because it is essentially a relatively simple ledger structure with a fixed simple input and output format (bookkeeping). However, I don’t think that all blockchains will have this simple structure in the future. The success of blockchain still needs to face the following problems:

The first is the input/output problem. In many complex scenarios, we will face more situations and variables. In fact, the so-called "smart contract" is an input/output mechanism with judgment conditions. Once the input source and input content become more complex and diverse, there will inevitably be more complex game situations.

The second is the problem of data storage and processing. Bitcoin currently generates nearly 1M blocks every 10 minutes, and its average transaction processing capacity per second is still in the single digit. Even so, the network ledger has exceeded 80G so far. If the role of blockchain is to be further utilized, all data cannot be placed in the chain. There must be a "Blockchain Data Center" to store off-chain data through side chain verification. At the same time, due to the limitations of node equipment, network bandwidth and consensus mechanism, the current processing capacity is also seriously insufficient, and it is unable to meet the needs of real-time concurrent processing of large-scale data.

I have worked in the anti-fraud team of Google search engine for many years. I imagine that when all advertising information data is no longer limited to one company, but an open data system under a certain privacy protection mechanism, receiving joint maintenance and supervision by everyone, is it still possible for the platform to do evil? If the consensus computing power of the group POW can be further used to solve problems such as click fraud that have been plaguing the advertising system, how wonderful it would be!

4. Practice makes perfect & three points of thinking

Thanks to Mr. Bai Shuo for his thoughts on blockchain, which finally gave me the motivation to write down my own humble opinion. Although blockchain is very popular, it is still in its early stages of development. It is inseparable from everyone's continuous practice and trial and error, and at the same time, combined with the debate and summary of various views, the technology, products, and business models are steadily developed step by step. Blockchain technology is not a castle in the air. Only in practice can there be further feedback and progress.

Thinking 1: Selection and optimization of consensus mechanism

There is a certain amount of room for thought on how to choose and optimize the consensus mechanism. Currently, there are two main consensus mechanisms: POW (based on computing power) and POS (based on equity), each with its own advantages and disadvantages. I will not go into further detail here. There are also some consensus mechanisms based on storage or response. Since the consensus mechanism is the fundamental guarantee for maintaining the blockchain system, it is worth making further efforts to explore, optimize and improve it.

Thinking 2: Privilege mechanism of alliance/private chain

If it is a purely tool-based private chain, we will not discuss it here because it is just an internal system. If it is a consortium chain or a private chain that introduces a certain gaming mechanism, how to introduce the privilege mechanism in it without destroying the original integrity and effectiveness of the blockchain system is also worth discussing.

Thought 3: The Ultimate Form of Decentralization

The decentralization we are talking about now is to allow some small centralized nodes to exist. What about the future, a completely distributed system? Is decentralization an intermediate state or an ultimate state? If everyone believes that the world of distributed applications will be in the future, then decentralization is an intermediate state. Many attempts are not too advanced but are not enough. If decentralization is the ultimate state, this is obviously impossible.

Compared with other technologies, blockchain technology is so fascinating, from early geeks to now financial bigwigs. One of the important points is that blockchain technology has a soul. This soul or guiding ideology is decentralization, or liberalism, Austrian economics, etc. It has a relatively complete set of ideologies and has the potential to subvert and innovate the underlying existing system, which is really exciting.

I remember in the late 1980s, there were no telephones at home. There was a telephone room in the community. When there was a telephone, the aunt would call downstairs and then run to the telephone room to answer the call. It didn't feel particularly inconvenient at that time. Think about it now, how would you feel if you didn't have a mobile phone for half a day? What I want to say is that information and even intelligent interaction and sharing will definitely be a big trend in the future. We can't just sit in the well and watch the sky, we must have the courage to break through and try, because the acceleration of the future will definitely exceed our imagination! Let's encourage each other!