[Perspective] Decentralization Does Not Imply Inaction: What Exactly Is Decentralization?

Observations presented in this article reflect diverse opinions and do not represent the stance of “WEB3+”

Decentralization does not mean inaction

I have many friends who are also in the blockchain industry, and while we share similar values and judgments about various matters, there is one exception worth mentioning. Several of my friends believe that Ethereum can never achieve the level of decentralization that Bitcoin has. They argue that true decentralization requires the removal of Vitalik; as long as he remains, Ethereum cannot truly be decentralized. Furthermore, many believe that Proof of Work is superior to Proof of Stake, even though the latter has become mainstream today, deemed a necessary evil or a trade-off after weighing options. I disagree with the above views, and this article will first discuss the former point, while another piece will address PoS.

Brief discussion on decentralization

While I openly state that I do not believe Vitalik is an obstacle to Ethereum’s decentralization, I often find myself tangled in related discussions, reflecting on my role at LikeCoin. I cannot compare myself to Vitalik, but at a scale almost a hundred thousand times smaller, I face very similar situations, often perceived as someone who pretends not to be important, yet I frequently engage through writing and advocacy, leading the community. Ironically, friends often say things like, “I don’t know what you’re talking about, but I trust you.” This clearly indicates sincere recognition, yet it also reflects a failure in my discourse to enable full understanding and independent judgment, leaving me with mixed feelings and making me particularly empathetic towards this issue.

To avoid explaining blockchain’s “decentralization” through academic concepts, one can reverse the perspective: if a public chain can be paralyzed or manipulated due to natural disasters, national policies, or commercial interests, it is not sufficiently decentralized. In other words, to achieve decentralization, one must dismantle potential single points of failure that could destroy the system.

From this perspective, we can evaluate the level of decentralization of individual public chains across various dimensions. In technical terms, this can be quantified by the Nakamoto coefficient, which indicates the minimum number of nodes that must be controlled to halt the entire chain. For instance, the Nakamoto coefficient for Binance chain is 7, meaning that controlling the largest 7 nodes would allow for complete manipulation of Binance chain. It is important to note that quantitative indicators can only provide a rough estimate. Consider a scenario where the top 7 nodes are all owned by the same company or housed in the same data center; this would be vastly different from a situation where those 7 nodes are distributed across 7 continents and managed by unrelated stakeholders, revealing a stark contrast in decentralization.

Decentralization is a dynamic game

Technology is relatively static; if designed well before the genesis block, it can withstand for a long time. However, when revolutionary technologies such as quantum computing emerge, it is essential to update the system accordingly. Other aspects, like government intervention and geopolitical factors, change much more rapidly, necessitating timely responses. Decentralization is a long-term game; it is not a “completed tense” but rather an “ongoing tense,” akin to an ongoing chess match where we must respond to each move made by the opponent.

To mitigate political risks, the primary strategy is to avoid reliance on government funding. This is challenging for most traditional NGOs, yet many public chains manage to navigate this successfully, as they do not receive government subsidies in the first place. However, with recent governments explicitly expressing support for specific public chains and presidents participating in individual projects, circumstances are changing. Both Vitalik and Solana founder Anatoly Yakovenko have clearly stated that being too close to the government contradicts the spirit of decentralization, which is reassuring, but the situation for other public chains remains uncertain.

Further extrapolating, any foundation is an organization registered in a specific country. Although large projects can opt to register in costly neutral countries like Switzerland, they remain subject to specific legal frameworks and still face the risk of being shut down. Moreover, foundations might exhaust their resources and be forced to cease operations. The ability to sustain operations in the absence of basic resources presents a strict test for public chains. Interestingly, Ethereum, which has been criticized in recent years for its foundation’s poor performance, is one of the few public chains that would likely not collapse even without a foundation, indicating a high degree of decentralization.

Don’t have a “Plan B,” have a “Plan Coin”

Recently, Vitalik addressed criticisms of the Ethereum Foundation (EF) during an interview, explicitly stating that “decentralization does not mean doing nothing.” He pointed out that the EF should engage in neglected areas to maintain ecological balance and, once resolved, redirect resources elsewhere. Although Vitalik did not explicitly state this, the same logic applies to himself, as he actively participates in restructuring the EF.

Friends criticize Vitalik for his pointed comments about Ethereum, claiming his perspective is incomplete. Community involvement is a responsibility; the community needs to ensure everyone’s right to voice their opinions, rather than blaming participants who actively express themselves and advocate for change.

For instance, in certain discussions, I find myself agreeing with Vitalik. I accept his analysis after reading his writings, but I do not blindly accept everything he says as a “V God.” I am merely a small player in the Ethereum ecosystem, surrounded by many capable individuals; I certainly do not act as a blind follower, and the community has previously rejected some of Vitalik’s proposals. Of course, I cannot deny that some people idolize him, but even if such individuals exist, it cannot be attributed to the “idol.” Furthermore, even the reclusive (or deceased) Satoshi Nakamoto has unwavering followers; unless one does absolutely nothing from the outset, it is impossible to avoid blind followers.

Once, a friend asked me what LikeCoin’s “Plan B” was, implying that in extreme situations, where would the content stored in the ecosystem go. I jokingly responded that we do not have a Plan B, only a “Plan Coin.” A Plan B is a traditional approach to contingency planning, such as regularly storing data on Amazon while also preparing a backup on Google Cloud. While a Plan B is acceptable, a “Plan Coin” takes it further by increasing system resilience through economic incentives and game theory, constructing an antifragile ecosystem that can adapt to various changes while actively pursuing decentralization.

In the context of founders, to decentralize a project, the Plan B mindset suggests being at the center of power while preparing successors at all times. In contrast, a more proactive “Plan Coin” approach involves recognizing oneself as one of the risks while addressing various threats to centralization, thus making one’s existence as dispensable as possible.

Decentralization does not mean inaction; rather, it involves taking proactive steps while avoiding becoming a single point of failure.

p.s. If I weren’t too commercial, I would certainly have a professional ailment, as I find myself in the historically significant city of Athens, under the protection of philosophical sages and gods, yet I see only ATH ENS.

Original source: Decentralization does not mean inaction