Is Bitcoin truly decentralized?

[prudencetoller]

I can say that bitcoin is about 85% decentralized. well, you can choose to become anonymous or not while using bitcoin. Many bitcoiners only care about making profit from trading so that they reveal their true identity to an exchange in order to register an account. Bitcoin is always a good currency for people who do not want to provide their identity to the world

[wearepoor]

Proponents of Bitcoin claim that Bitcoin is a decentralized system. And because it is decentralized, nobody can control it - not you, not me, not the central banks, not the Federal Reserves, not anybody. Bitcoin nodes are distributed extensively and not kept in a centralized system (for instance, in one server) which can be susceptible to hacking or take over. While the inherent system is designed to operate in a decentralized manner, external factors are making Bitcoin less decentralized. Why? Because Bitcoin transaction requires miners to validate and update transactions on the Bitcoin network. To do that, miners need hashpower. The greater the hashpower, the greater control the miner or group of miners have on the system. Currently, Chinese miners control more than 70% of the total Bitcoin mining hashpower in the world, making China the undisputed world leader in Bitcoin mining. Talk about decentralization. According to blockchain.info, 4 (19%) of the total of 21 mining pools control more than 50% of the hashing power, while the rest of the 81% are left with 47% of the remaining hashpower. Doesn't sound so decentralized, does it?

Moreover, Bitcoin developers are controlled largely by Bitcoin Core group that is being run by people hired by Blockstream, a private company. So now, you have bitcoin mining controlled by a small handful of miners and the developers controlled by a group of people belonging to a single private entity. Some argue that this is exactly what makes Bitcoin decentralized because none of them can gain control over it. Really? Because from the outside, it looks more like a company being run by two hard-headed CEOs who are only looking out for their own self-interest. When two CEOs clashes against one another, is that what they refer to as decentralized?

So while Bitcoin's inherent system is decentralized, the governing factors (hashpower dominance by Chinese miners and software development by a small group of developers) makes it less so.

As per me, bitcoins are decentralized so far its in your personal wallet; once you transfer it to the bitcoin exchanges then you have to follow their rules and i think its quite necessary to them for smooth transactions.

[Lieldoryn]

This is a big misconception that bitcoin provides privacy. If you even once went online then your footprints remain there forever. To these tracks, you can monitor all your actions and the movement of money. Bitcoin is just an illusion of anonymity.

[hatshepsut93]

I think mining centralization can be a serious nuisance for the Bitcoin network, although not an existential threat. Launching 51% attack, which is the worst case scenario, is very unlikely, because of giant costs of it, and it can only stop the network and make some double spending. But there are other attacks that can be achieved by having significant amounts of hashing power. Right now majority of miners come from China, so we can imagine scenario when Chinese government orders miners to not include transactions of some foreign companies, creating artificial delays for victims. Miners also hold some political power over Bitcoin, because they can block proposed changes. In the long run, miners follow the market, but in short term miners also have some influence over the market.

[deisik]

Proponents of Bitcoin claim that Bitcoin is a decentralized system. And because it is decentralized, nobody can control it - not you, not me, not the central banks, not the Federal Reserves, not anybody. Bitcoin nodes are distributed extensively and not kept in a centralized system (for instance, in one server) which can be susceptible to hacking or take over. While the inherent system is designed to operate in a decentralized manner, external factors are making Bitcoin less decentralized. Why? Because Bitcoin transaction requires miners to validate and update transactions on the Bitcoin network. To do that, miners need hashpower. The greater the hashpower, the greater control the miner or group of miners have on the system. Currently, Chinese miners control more than 70% of the total Bitcoin mining hashpower in the world, making China the undisputed world leader in Bitcoin mining. Talk about decentralization. According to blockchain.info, 4 (19%) of the total of 21 mining pools control more than 50% of the hashing power, while the rest of the 81% are left with 47% of the remaining hashpower. Doesn't sound so decentralized, does it?

Moreover, Bitcoin developers are controlled largely by Bitcoin Core group that is being run by people hired by Blockstream, a private company. So now, you have bitcoin mining controlled by a small handful of miners and the developers controlled by a group of people belonging to a single private entity. Some argue that this is exactly what makes Bitcoin decentralized because none of them can gain control over it. Really? Because from the outside, it looks more like a company being run by two hard-headed CEOs who are only looking out for their own self-interest. When two CEOs clashes against one another, is that what they refer to as decentralized?

So while Bitcoin's inherent system is decentralized, the governing factors (hashpower dominance by Chinese miners and software development by a small group of developers) makes it less so

I come to disagree with your core statement

That Bitcoin is internally decentralized since it is obviously not. You refer to miners as external factors but they are an integral part of the system which were there from the beginning and cannot made separated from it without destroying Bitcoin itself (or turning it into something else). Thus the miners are something which obviously belongs to the core of the system. So if Bitcoin mining is centralized (as it is today), it could be said that Bitcoin is centralized too (at least, in this aspect), and it is a logical outcome of the flaw in the Bitcoin blueprint or design (if we consider this situation as detrimental, of course)

[BitcoinBallerina]

Yes it is. No one individual can control Bitcoin, but rather it is controlled by a host of nodes running all over the world which each must approve of every transaction.

[Umbrella Holdings]

Bitcoin allows me to safely store my money. I can make fast and low cost money transfers with Bitcoin. Money control is entirely mine. I think Bitcoin is decentralized.

[Barbarian]

Proponents of Bitcoin claim that Bitcoin is a decentralized system. And because it is decentralized, nobody can control it - not you, not me, not the central banks, not the Federal Reserves, not anybody. Bitcoin nodes are distributed extensively and not kept in a centralized system (for instance, in one server) which can be susceptible to hacking or take over. While the inherent system is designed to operate in a decentralized manner, external factors are making Bitcoin less decentralized. Why? Because Bitcoin transaction requires miners to validate and update transactions on the Bitcoin network. To do that, miners need hashpower. The greater the hashpower, the greater control the miner or group of miners have on the system. Currently, Chinese miners control more than 70% of the total Bitcoin mining hashpower in the world, making China the undisputed world leader in Bitcoin mining. Talk about decentralization. According to blockchain.info, 4 (19%) of the total of 21 mining pools control more than 50% of the hashing power, while the rest of the 81% are left with 47% of the remaining hashpower. Doesn't sound so decentralized, does it?

Moreover, Bitcoin developers are controlled largely by Bitcoin Core group that is being run by people hired by Blockstream, a private company. So now, you have bitcoin mining controlled by a small handful of miners and the developers controlled by a group of people belonging to a single private entity. Some argue that this is exactly what makes Bitcoin decentralized because none of them can gain control over it. Really? Because from the outside, it looks more like a company being run by two hard-headed CEOs who are only looking out for their own self-interest. When two CEOs clashes against one another, is that what they refer to as decentralized?

So while Bitcoin's inherent system is decentralized, the governing factors (hashpower dominance by Chinese miners and software development by a small group of developers) makes it less so.

This is something that we have known for quite some time, bitcoin has less points of failure than most systems but that does not mean that it does not have them, however as the price goes higher and higher it becomes possible for others to enter the mining game and defy the Chinese hegemony.

[Wind_FURY]

Bitcoin is less decentralized than it used to be but it is still good enough. The hard fork to BitcoinCash is more or less a proof that there are powerful people and miners in Bitcoin who are very unhappy with the direction of the network that all they can do is hard fork away instead of gaining control.

We all know miners want bigger blocks. If the network was centralized, we would have bigger blocks by now.

[babysweetTiger0401]

Yes it is, because if it is not. Perhaps, perhaps all government to all countries has capability to control our coin. And sure the quotation will no longer be post here that "we are the bank of our own savings" but because of bitcoin was decentralized we are capable to become the bank of our coins which is Bitcoin.

[sasaku bitbit]

Maybe from some countries have a way with the ability to control all the coins in the US so completely decentralized bitcoin on the direction of the network that can hold larger blocks have but it would be difficult to gain control of coin bitcoin. so not being able to be a coin bank that we have

[deisik]

Bitcoin is less decentralized than it used to be but it is still good enough. The hard fork to BitcoinCash is more or less a proof that there are powerful people and miners in Bitcoin who are very unhappy with the direction of the network that all they can do is hard fork away instead of gaining control.

We all know miners want bigger blocks. If the network was centralized, we would have bigger blocks by now

We already have bigger blocks by now

I refer to Bitcoin Cash obviously. This could be thought of as a nice workaround instead of a direct attack against original Bitcoin which would likely hurt it seriously if not kill it on the spot. In other words, the network is centralized (at least, was before the split) but the miners chose by far less risky way to exert their influence since, as I already said, exerting this influence directly would most certainly wreak havoc in Bitcoin, thereby killing the golden goose that Bitcoin has been for the last couple of years

[marky89]

Bitcoin is still decentralised. Miners can somehow influence its price but it is minimal. They can't control it entirely unless some miner or group of miner controls 100% of the hash power which is close to impossible.

It's more complex than that. One potential issue is geographic centralization, particularly as it relates to national boundaries. The vast majority of global hashpower (something like 70%) is controlled by Chinese mining pools. Let's ignore for the moment the possibility of miner collusion to commit selfish mining or 51% attacks, or that Bitmain itself might control a majority of all hashpower.

The issue I'm pointing out is that having so much hashpower under one national jurisdiction means it could all be shut down quickly by one national government. That could cause massive and prolonged network disruption if difficulty were to drop that way. It would be far better for hashpower to be geographically decentralized.

[deisik]

Bitcoin is still decentralised. Miners can somehow influence its price but it is minimal. They can't control it entirely unless some miner or group of miner controls 100% of the hash power which is close to impossible.

It's more complex than that. One potential issue is geographic centralization, particularly as it relates to national boundaries. The vast majority of global hashpower (something like 70%) is controlled by Chinese mining pools. Let's ignore for the moment the possibility of miner collusion to commit selfish mining or 51% attacks, or that Bitmain itself might control a majority of all hashpower.

The issue I'm pointing out is that having so much hashpower under one national jurisdiction means it could all be shut down quickly by one national government. That could cause massive and prolonged network disruption if difficulty were to drop that way. It would be far better for hashpower to be geographically decentralized.

There is no cloud without a silver lining

That event, while certainly causing a lot of havoc in the markets as well as plenty of pain in the ass of every Bitcoin holder, would likely be a perfect opportunity to make a huge leap ahead and finally get rid of rogue miners altogether. I refer first and foremost to changing Bitcoin network security model from PoW to PoS model. Right now such move is next to impossible to make since no miner in his right mind and solid memory will ever agree to this, but in that case (when they choose to attack the network), their voice will be irrelevant for pretty obvious reasons

[xskl0]

If you want decentralization come to Bitcoin Cash

[induktor]

Bitcoin is still decentralised. Miners can somehow influence its price but it is minimal. They can't control it entirely unless some miner or group of miner controls 100% of the hash power which is close to impossible.

I disagree, it is VERY possible, and it will be the end result in the long run.

As long as we keep using this PoW , which is asic friendly, there would be more and more concentration of mining power by fewer people, as mining companies are bought by even bigger mining companies.
that's what big companies do, buy smaller ones to increase power and eliminate competition.

The end result could be no other than 1 powerful owner with close to 100% mining power, and we can do nothing, so the entire btc money supply is at the mercy of this guy.

it WILL happen, it is just a matter of time.

we need to change the PoW and make it change its properties over time, so it would be impossible to make an asic for it, GPU usage levels the plain field for everyone, the smaller and the big miners, anyone can buy a GPU, but not asic chips in lower quantities, only the powerful asic companies produce them, because you need to manufacture millions to justify the expenses of production.

if you want truly decentralization, it is the only way, with standard consumer products, like GPUs.

thanks my point of view.
indkt.

[DoublerHunter]

Bitcoin is truly a decentralized coin because it is not controllable by the government, if bitcoin is not centralized then we can see a lot of governments that already controlling bitcoin on their will, bitcoin is not owned by any person, organization or even company so putting our money in bitcoin will help us to void the government just for example is the inflation rate of fiat.

[Prince8]

its decentralized, yet influenceable

[bvg96634]

Yes, truely Bitcoin is decentralised. Because Bitcoin is not having any central control. It's having freedom . It's not having any information repository. so Bitcoin is decentralised one.

[marky89]

Bitcoin is still decentralised. Miners can somehow influence its price but it is minimal. They can't control it entirely unless some miner or group of miner controls 100% of the hash power which is close to impossible.

It's more complex than that. One potential issue is geographic centralization, particularly as it relates to national boundaries. The vast majority of global hashpower (something like 70%) is controlled by Chinese mining pools. Let's ignore for the moment the possibility of miner collusion to commit selfish mining or 51% attacks, or that Bitmain itself might control a majority of all hashpower.

The issue I'm pointing out is that having so much hashpower under one national jurisdiction means it could all be shut down quickly by one national government. That could cause massive and prolonged network disruption if difficulty were to drop that way. It would be far better for hashpower to be geographically decentralized.

There is no cloud without a silver lining

That event, while certainly causing a lot of havoc in the markets as well as plenty of pain in the ass of every Bitcoin holder, would likely be a perfect opportunity to make a huge leap ahead and finally get rid of rogue miners altogether. I refer first and foremost to changing Bitcoin network security model from PoW to PoS model. Right now such move is next to impossible to make since no miner in his right mind and solid memory will ever agree to this, but in that case (when they choose to attack the network), their voice will be irrelevant for pretty obvious reasons

I think you'll find that most bitcoiners oppose proof-of-stake. Has there been shown to be a viable proof-of-stake model as a proof-of-concept, let alone at scale? I haven't even seen a whitepaper that was altogether convincing, and that didn't make grand assumptions about the incentive model underlying PoS.

For now, PoW has been shown to work. Even facing a majority of rogue miners, I think that most bitcoiners would prefer to switch PoW algorithm and continue trying to address mining centralization than to go the route of PoS.