So which is the best update/upgrade to BTC that does not affect its decentralisation status?
Well, some argue that larger blocks will lead to greater centralization. I think they're wrong, but let us work with that assumption for now.
The max block size today is 1MB.
The SegWit Omnibus Changeset (bitcoin-core recent releases) allows miners to create blocks up to 4MB in size, and all others have no choice but to swallow it.
BU allows all participants to advertise their max block size to the network. Miners know that, should they create blocks larger than the majority will accept, those blocks would be orphaned, and that miner would eventually run out of money, and of out of business. If most participants can handle 4MB blocks, they will signal for 4MB blocks, and the
max block size allowed will be 4MB. If most participants can handle 7MB blocks, they will signal for 7MB blocks, and the
max block size allowed will be 7MB. If most participants can handle 1MB blocks, they will signal for 1MB blocks, and the
max block size allowed will be 1MB.
BU is the only system currently on the table that eliminates the need for future protocol changes for simple increases in max block size. It is also the only alternative scaling solution that allows the majority to set a max block size below 4MB.
Right now, the dominant implementation (core legacy) is significantly dominant on the network. This is also a form of centralization.
Mining is pretty centralized already. There is no structural barrier to new entrants, but capital requirements are currently significant. It is hard to know whether or not this will change in the future.
