Is Bitcoin truly decentralized?

[Picky]

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.

[Granxis]

When we look at the big stock market, we see that they are not completely independent, Bitcoin will be meaningless without stock exchanges, ATMs are not widely available and their fees are very high.

[aleksej996]

It ain't perfect, that is for sure. 
Mining is too centralized, I agree. Many altcoins have lower block time to battle mining pools, Bitcoin doesn't.
But remember that people can change mining pools and those mining pools can be left without the hashing power.
People can also choose a different wallet, many don't use Bitcoin Core (mobile wallets). However the majority of full nodes are Bitcoin Core, that is something to worry about.

As you can see from recent hardfork, people have a choice. Always.
I am not worried about the protocol that much, the nature of capitalism is what worries me the most. Even tho miners can choose different mining pools, I am worried that there will be less and less miners. And they might lean to a smaller and smaller area on the map and be under the same government as they are now, for economical reasons.

I don't believe that Bitcoin is a problem, I think it is the best solution we got right now. I am just afraid that it will not be enough.
But what is the point of just doing nothing and shaking your head. If you see a possible way out of the bad system, you might as well take the chance. It might be the only one you get or it might even be the one that will make the world a better place to live.

[Euro1000]

I fully agree:Mining is too centralized.
Beside some miners work under the same governmental umbrella there is still the possibility that you have different mining pools which belong to one group of mining pool - who knows.
Yes, it is not perfect - it could be better, but it could also be much more worse.

[GideonGono]

It ain't perfect, that is for sure.  
Mining is too centralized, I agree. Many altcoins have lower block time to battle mining pools, Bitcoin doesn't.
But remember that people can change mining pools and those mining pools can be left without the hashing power.
People can also choose a different wallet, many don't use Bitcoin Core (mobile wallets). However the majority of full nodes are Bitcoin Core, that is something to worry about.

As you can see from recent hardfork, people have a choice. Always.
I am not worried about the protocol that much, the nature of capitalism is what worries me the most. Even tho miners can choose different mining pools, I am worried that there will be less and less miners. And they might lean to a smaller and smaller area on the map and be under the same government as they are now, for economical reasons.

I don't believe that Bitcoin is a problem, I think it is the best solution we got right now. I am just afraid that it will not be enough.
But what is the point of just doing nothing and shaking your head. If you see a possible way out of the bad system, you might as well take the chance. It might be the only one you get or it might even be the one that will make the world a better place to live.

I highlighted the key words of your paragraphs. This is true. Let's just see it that there are companies who can set their own rules and salary to their employess since government has no control of it (a symbolism for decentralized Bitcoin) but the thing is the employees can always resign with no further adieu since there is no contract that binds them (a symbolism to a greater freedom that Bitcoin has given us).


By the way, I find your topic interesting and this is exactly my concerns when I realized that Bitcoin is not fully decentralized considering the factors you had aforementioned. I am waiting for the reply of the respected bitcointalkers out there. I would like to extend my compliments to you.

[matuson]

The independence of bitcoin is a myth. And decentralization, too. Recently all of us became hostages of a fork. Miners began to dictate terms and it is also pressure. In the state of the economy there is an antitrust law. It is able to solve these problems. In the bitcoin economy, this mechanism is not and we become hostages of the situation.

[DannaWonder]

It is decentralize only in bitcoin itself but if you put it on the exchanges and other websites that holds it I think it losses it because someone is starting to regulate it

[co0ler]

Bitcoin may not be perfect, but it's the best thing we have. I just wish there was more competition in mining.

Maybe that's coming... Did you guys see this?
http://www.zerohedge.com/news/2017-08-08/russia-launches-100-million-bitcoin-mining-operation

[gentlemand]

Bitcoin is certainly distributed well enough. As for whether it's decentralised, in its present form I would say it isn't but there is the capacity to get it back if flagrant abuses were becoming more brazen.

It's something that's never been properly put to the test. Perhaps it needs to be.

[Ayiranorea]

Bitcoin is truly decentralized, else this could have been manipulated often by the user who holds a big volume of bitcoin. As it functions on an entirely open platform the transactions were transparent. This makes it a trusted way for large volume transactions.

[U2]

If you don't agree with what the devs are doing you can always fork or you can always just create an altcoin. You're free to do literally whatever you want so just go ahead and do it. It's decentralized because no central controller is sitting there waiting to change something for their own benefit. How many people in the world do you honestly think could be (useful/successful) bitcoin devs?

[bitbunnny]

Bitcoin is decentralized and it's not depending on any central bank, government or regulatory agency. When it comes to manipulation I don't say there is no chance but I think the possibilities are minimal. Minera could be a different story but still I don't think they influence that much.

[gentlemand]

It's decentralized because no central controller is sitting there waiting to change something for their own benefit. How many people in the world do you honestly think could be (useful/successful) bitcoin devs?

Erm, does that not mean that Bitcoin development is therefore extremely centralised?

[cpfreeplz]

It's decentralized because no central controller is sitting there waiting to change something for their own benefit. How many people in the world do you honestly think could be (useful/successful) bitcoin devs?

Erm, does that not mean that Bitcoin development is therefore extremely centralised?

It started off a lot more centralized with only one developer haha. Lots of altcoins have 1 or 2 devs (ETH) but does that mean they are centralized? Not really. I mean ETH isn't actually truly decentralized and is a shitcoin/ponzi to begin with but that's a whole other discussion.

Seriously though, not enough people understand the fundamentals of bitcoin and can make regular contributions to it so that's where there are a small group of people that do it. You can always 'vote' against it... So it's still decentralized.

[mrcash02]

Decentralized until certain point. If someone has too many Bitcoins this one can control the market influencing the price, it's a kind of centralization. In a decentralized world only those who deserve becomes rich and powerful, but when they achieve it they can control others very well if they wish.

[gentlemand]

Decentralized until certain point. If someone has too many Bitcoins this one can control the market influencing the price, it's a kind of centralization. In a decentralized world only those who deserve becomes rich and powerful, but when they achieve it they can control others very well if they wish.

Someone owning a vast amount of coins isn't centralised. They bought them freely off people who sold them freely. If people were prevented from buying or selling as many as they wanted it would become more... centralised as some authority figure would be dictating that. 

I think we would probably end up going batty attempting to define decentralisation in the context of everything.

[Andre_Goldman]

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.

Mining became centralized indeed, that's why we have few processors manufactures at semicondutor industry, big money can access the best professionals, cheap government electricity subside, etc. I guess the balance at bitcoin ecosystem came when you give a copy of the the database (Blockchain) among as much people as possible (users)  

[mrcash02]

Decentralized until certain point. If someone has too many Bitcoins this one can control the market influencing the price, it's a kind of centralization. In a decentralized world only those who deserve becomes rich and powerful, but when they achieve it they can control others very well if they wish.

Someone owning a vast amount of coins isn't centralised. They bought them freely off people who sold them freely. If people were prevented from buying or selling as many as they wanted it would become more... centralised as some authority figure would be dictating that. 

I think we would probably end up going batty attempting to define decentralisation in the context of everything.

No doubt the Bitcoins were adquired spontaneously for both sides wishes (the seller and buyer). But the point is that the buyer can keep adquiring more and more Bitcoins. While his fortune grows stronger, other's fortunes will decrease or keep the same. I'm not saying it's wrong, it can be achieved by his own merit.

And when the biggest part of Bitcoins are in his hands he will choose when to sell, so he controls the price by controlling the disponible supply at the market. Otherwise, if people start seeing this they will want to stop using Bitcoins and this could kill the currency, that is possible risk for Bitcoin sustainability.

[CageKennylz]

I think BTC is decentralised as much as possible, there will never be a fully decentralised currency as long as technology keeps changing and improving, someone needs to update the code or be able to fork. Unless of course an AI controls and auto-updates the currency.

[GideonGono]

It started off a lot more centralized with only one developer haha.

Might be the reason why Satoshi Nakamoto decided to disappear in the eyes of the public to erase the thinking that he is the irony of the decentralized currency he had developed.

Lots of altcoins have 1 or 2 devs (ETH) but does that mean they are centralized? Not really. I mean ETH isn't actually truly decentralized and is a shitcoin/ponzi to begin with but that's a whole other discussion.

Who says ETH is somehow decentralized cryptocurrency? Anyone who is knowledgeable in the cryptoworld know that ETH is centralized.

Seriously though, not enough people understand the fundamentals of bitcoin and can make regular contributions to it so that's where there are a small group of people that do it. You can always 'vote' against it... So it's still decentralized.

It is decentralize but not fully decentralized. The foundation of decentralization in Bicoin is the freedom to make a choice like if you refuse using Bitcoin Core wallet then you can try other which you think is much better like Mycelium, Electrum and etc. Also if it is truly centralized then wayback August 1 we shouldn't been worried about the possibility of hardfork which proves that they need consensus, a support from the community in excecuting those plans or proposals.

Decentralized until certain point. If someone has too many Bitcoins this one can control the market influencing the price, it's a kind of centralization. In a decentralized world only those who deserve becomes rich and powerful, but when they achieve it they can control others very well if they wish.

I believe that bitcoins are distributed among the people well. A person or group of people holds a few thousands of bitcoin but not a million unless you are Satoshi Nakamoto since as we know that it is possible for him to have those figures though we can't verify this as a fact but a possibility. I doubt that Satoshi would just thoughtlessly sell all his bitcoins in one go causing his craft's market to cascade.