The Road to Decentralization By DailyCoin
- The Solana network started experiencing “intermittent performance degradation” in August.
- As the Solana network recently stopped working, there are concerns about centralization.
- Networks with centralized functions eventually become apparent during an issue in the network.
It was created to solve network and financial centralization. The system also shifts power back to users. The blockchain has become more than just a payment system. It can be used to integrate functionally across many industries. To offer enterprise clients enclosed solutions, private, permissioned and finally centralized blockchain chains were created. However, Solana’s “ killer” presumption placed a stoplight on the network.
Solana’s Tainted Status
A trustless network is one of the blockchain industry’s hallmarks, as it differs from enacted human interactions, where trust needs to be established. Blockchains can be trusted as they don’t have to be controlled by any one person. Solana’s network outage, which saw Solana suspend block creation for over 11 hours, due to a “large increase in transaction load,” raised concerns about network centralization.
The community already had ideas for centralization. The cult-like nature of the industry can lead to a negative outcome. It hinders innovation. Investors who fight for their ideal blockchains will not be able to overcome industry inconsistency.
However, the arguments in support of Solana were acknowledged with a touch of humor. Fiskantes, a Crypto Twitter trader (NYSE:), offered three views on why Solana has been disregarded among ETH and BTC maximalists. Fiskantes argued that Solana should have a CEO and increased VC backing. He also suggested the possibility for node centralization.
Additionally, eric.eth, co-author of EIP-1559, argued that Solana having a CEO and “centralized stake” is counterintuitive to the growth of the decentralized network. Moreover, Evan van Ness emphasized that “centralization is not superior-tech,” although chains in every bull market develop a server-dependent network.
Solana was faced with network problems and there were rumors of a forced shut down. However, Solana pointed out that the forced restart of the network was approved by more than 80% of validators who upgraded to Mainnet Beta 1.6.25. Regardless, Solana’s perception within the community has changed from an “Ethereum Killer” to a possible “centralized” network.
On The Flipside
- Solana’s network impairment was attributed to over 400,000 TPS.
- The network events did not heavily influence SOL’s token price.
The Great Decentralization Divide
Debate about what centralization entails within the blockchain industry is distilled and reconstructed as technology evolves. Spencer Bogart, from Blockchain Capital, wrote that blockchains that don’t include all decentralizing parts that constitute the blockchain “will end up as less efficient varieties of today’s centralized platforms.”
While some blockchains demand a more centralized outlook to meet enterprise needs while still using blockchain as an underlying technology, the industry’s ethos promotes a decentralized network. History has shown that every project trying to create a moderately decentralizing network got a poor reputation.
Criticisms were raised about the way that it centralized validity and nodes. This created an uneven playing field, where some would not benefit. Its centralization was criticised by researchers, who noted that the network does not have many of the same features as Ethereum or Bitcoin. Bancor was a decentralized cryptocurrency exchange that used central exchange strategies in order to prevent a hack which saw it lose $23.5million.
While complete decentralization may not be possible for all blockchains in the future, it can help to keep communities from being misled by fake claims. Moreover, it damages the network’s reputation, although investors and high capital VC could still benefit or have already benefited from the project.
Why Should You Care?
A blockchain that is centralized can only be harmful if it presents itself as decentralized while still following the same centralized routes. It reduces investor trust and causes investors to be more cautious about how they allocate funds. This can hinder innovation.
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