Explain me Like I'm 5 why Bitcoin is decentralized

[acoindr]

It may help you to think of it like the Internet. Would you say the Internet is centralized? That one country completely controls it?

Of course not. The Internet is also decentralized.

Now, is does happen that the U.S. has a large measure of control and influence over the Internet, mostly because it's the country that created the Internet. The U.S. is home to the DNS root servers and ICANN, the organization that administers Top Level Domains (TLDs) like .com, .co.uk, etc. Since people are good with remembering names, but bad with remembering numbers like IP addresses, shutting down or corrupting domain name service would largely make the Internet unusable for most of the world.

the problem is much bigger than what you describe.



NSA's Lucky Break: How the U.S. Became Switchboard to the World
http://www.wired.com/politics/security/news/2007/10/domestic_taps

"All the traffic in the world went through Washington," Woodcock says. "But it was coincidence that it was Washington, more or less, and it was private-sector. And it probably wasn't tapped for at least a couple of years."

Bitcoin is not really decentralized anymore.  It's a system increasingly owned by a number of commerical enterprises.  Even IBM seems to be poking around these days.  Remember IBM is the primary technology support for all the big financial firms, including the ones that got the trillions in bailout money.  It's a clear sign of the current state of this particular corner of the field.

This I actually agree with, and do have some concern about. As major telecoms merge control over the pipes (or tubes if you prefer) becomes increasingly centralized. There was recently one big U.K. based merger I believe.

Still, my main point is not exactly about the infrastructure itself, but rather the idea of the Internet. If people don't like the companies (or countries) that increasingly have some measure of control or influence over how the Internet functions they will route around, and nobody can stop them. Bitcoin works the same way.

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[corebob]

The majority [of hashpower] has to agree to any changes in order for those changes to work, basically.

Fixed that for u.

and the problem is that we have hashing monopolies.  Is this really money for the people?  No, it isn't.

this is why I invented Confidence Chains.  Doesn't require mining but it is distributed/p2p.

Sounds interesting. Both mining and the POW hack always bothered me

there will be some upcoming releases soon.  I don't talk TOO much about it, because too many people on here monkey whatever claims I make, distracting away from what I'm doing and greatly distorting the facts.  It's turning out to be a huge problem.

you can find the initial whitepaper here: http://www.altchain.org

I already found this
https://groups.google.com/forum/#!topic/bitcoinx/oAERXr17zII

but I'll check that site out.

[bluemeanie1]

Bitcoin is not really decentralized anymore.  It's a system increasingly owned by a number of commerical enterprises.  Even IBM seems to be poking around these days.  Remember IBM is the primary technology support for all the big financial firms, including the ones that got the trillions in bailout money.  It's a clear sign of the current state of this particular corner of the field.

This I actually agree with, and do have some concern about. As major telecoms merge control over the pipes (or tubes if you prefer) becomes increasingly centralized. There was recently one big U.K. based merger I believe.

Still, my main point is not exactly about the infrastructure itself, but rather the idea of the Internet. If people don't like the companies (or countries) that increasingly have some measure of control or influence over how the Internet functions they will route around, and nobody can stop them. Bitcoin works the same way.

sure, the internet is becoming one huge American Intertube.

the same general threats exist with Bitcoin.  The typical way these things pan out is that centralization happens, the initial protocols suddenly cannot manage the capacity, then they say 'were gonna fix it!' and they take away the decentralization.  Then they start churning out technologies with flashy features that are committed to these new protocols.  Thus going back to a decentralized situation becomes extremely difficult and expensive for the average person.

These trends emerge in a number of areas of telecom.  For instance here in The Land Of The Free(tm) we had a big fuss about 'Network Neutrality' which was a highly politicized debate between the telecoms who wanted to create something like a toll-based information highway, and a few advocates here and there who wanted to keep things accessible for everyone.  If you ever watched PBS or Public Access TV you know where these sorts of populist movements end up(although I do sometimes like PBS when theyre not running Jerry Lewis telethons).

[Ecurb123]

for my mind the language analogy was the most fitting. But this is also why I like the idea of having good alt-coins going, in case power gets too crazy, the people can just shift to another coin.

[Walter Rothbard]

I am sure this was discussed a lot but I still don't understand.

I know the code is open and anyone can read it etc.

But for instance let's say I have an improvement to the code. It will only be accepted if the known developers will allow it - which means they have some control over it.

this is from wiki: (https://en.bitcoin.it/wiki/Myths#Bitcoin_is_not_decentralized_because_the_developers_can_dictate_the_software.27s_behavior)

"Though the developers of the original Bitcoin client still exert influence over the Bitcoin community, their power to arbitrarily modify the protocol is very limited."

So even wiki admits, that the developers do have some control over it!

wiki continues:
"Since the release of Bitcoin v0.3, changes to the protocol have been minor and always in agreement with community consensus."

what is exactly this "community consensus"? who are these people? I don't remember anyone asking me if I agree for each modification they are doing to the code. Ain't I part of the community?

The truth is that all I do is download bitcoin QT and hope for the best, while there are 100 or 1000 (or any other small amount) of people
who makes the decisions for us all.

So I am asking:
1)how can one say that bitcoin is totally decentralized?
2)Where there are people there is corruption, Aren't we suppose to be worried that this limited group of people will ruin the protocol?
3)Can someone explain in a nutshell what can the developers change and what they can't change in the protocol?







 

Suppose I give you 10,000 Testnet Bitcoins for a pizza.  You and I both think this is a great idea, the exchange is made, I get my pizza, you get your (worthless) Testnet Bitcoins.

Other people pick up on this and start exchanging Testnet Bitcoins.  Testnet Bitcoins gain value.  They start exchanging for real Bitcoins, for USD, for North Korean Yuan, for gold and silver and litecoins and crapcoins and stocks.  And pizzas.

The Bitcoin developers do not want Testnet Bitcoins to gain any monetary value.  In the past they have reset the testnet with a new genesis block to avoid this.  The current testnet is actually testnet3 because of those.

Suppose the Bitcoin developers get wind that Testnet Bitcoins are rising in value, and take action to prevent it.  They reset the testnet, create a new genesis block, make changes in the client to start a new chain off of the new testnet genesis block, there's a newly released client, and we have a testnet4.

But - suppose you and I and many other people really like our pizza, and we really like exchanging Testnet3 Bitcoins for pizza and other things.  Maybe we are irrational.  Or maybe we are enlightened.  Regardless, we really want to continue the economy we have built up on the Bitcoin Testnet, and the decision the developers have made would reverse all that.

So, we continue to use the original client, the one that still runs off Testnet3.  We ignore Testnet4.  We don't use the new Bitcoin client.  Eventually some of us take the Bitcoin code and release a new Testnet3-only client.  The testnet3 economy continues, thanks to our decentralized action.  We are not at the mercy of the developers at all - we can do whatever we want, whether other people like it or not.

That's decentralization.

[niothor]

It's a lie. Don't u know about the fork, when Gavin & Co asked big pool owners and they did a 51% attack and rolled back a lot of blocks?

So how exactly did they force anyone to change software?

Ok , so it appears that we might have the answer to our question sooner that expected , I'm sure you've already read about Coinvalidation,
https://bitcointalk.org/index.php?topic=332918.0

I thinks this is already a major test , community versus some of the members with power or influence around the foundation.

[gweedo]

Nobody controls it. Nobody can control it.

Like bittorrent, once the file is uploaded and a torrent cloud is created, lots of folks download the files but no one owns or controls it

Keep thinking that

[crazy_rabbit]

I am sure this was discussed a lot but I still don't understand.

I know the code is open and anyone can read it etc.

But for instance let's say I have an improvement to the code. It will only be accepted if the known developers will allow it - which means they have some control over it.

this is from wiki: (https://en.bitcoin.it/wiki/Myths#Bitcoin_is_not_decentralized_because_the_developers_can_dictate_the_software.27s_behavior)

"Though the developers of the original Bitcoin client still exert influence over the Bitcoin community, their power to arbitrarily modify the protocol is very limited."

So even wiki admits, that the developers do have some control over it!

wiki continues:
"Since the release of Bitcoin v0.3, changes to the protocol have been minor and always in agreement with community consensus."

what is exactly this "community consensus"? who are these people? I don't remember anyone asking me if I agree for each modification they are doing to the code. Ain't I part of the community?

The truth is that all I do is download bitcoin QT and hope for the best, while there are 100 or 1000 (or any other small amount) of people
who makes the decisions for us all.

So I am asking:
1)how can one say that bitcoin is totally decentralized?
2)Where there are people there is corruption, Aren't we suppose to be worried that this limited group of people will ruin the protocol?
3)Can someone explain in a nutshell what can the developers change and what they can't change in the protocol?







 

Suppose I give you 10,000 Testnet Bitcoins for a pizza.  You and I both think this is a great idea, the exchange is made, I get my pizza, you get your (worthless) Testnet Bitcoins.

Other people pick up on this and start exchanging Testnet Bitcoins.  Testnet Bitcoins gain value.  They start exchanging for real Bitcoins, for USD, for North Korean Yuan, for gold and silver and litecoins and crapcoins and stocks.  And pizzas.

The Bitcoin developers do not want Testnet Bitcoins to gain any monetary value.  In the past they have reset the testnet with a new genesis block to avoid this.  The current testnet is actually testnet3 because of those.

Suppose the Bitcoin developers get wind that Testnet Bitcoins are rising in value, and take action to prevent it.  They reset the testnet, create a new genesis block, make changes in the client to start a new chain off of the new testnet genesis block, there's a newly released client, and we have a testnet4.

But - suppose you and I and many other people really like our pizza, and we really like exchanging Testnet3 Bitcoins for pizza and other things.  Maybe we are irrational.  Or maybe we are enlightened.  Regardless, we really want to continue the economy we have built up on the Bitcoin Testnet, and the decision the developers have made would reverse all that.

So, we continue to use the original client, the one that still runs off Testnet3.  We ignore Testnet4.  We don't use the new Bitcoin client.  Eventually some of us take the Bitcoin code and release a new Testnet3-only client.  The testnet3 economy continues, thanks to our decentralized action.  We are not at the mercy of the developers at all - we can do whatever we want, whether other people like it or not.

That's decentralization.

It's true. That is what makes it decentralised. We can run our own. Indeed with testnet, we can keep using the new bitcoin software, just recompiling with the testnet3 genesis block if necessary.

[Gator-hex]

Bitcoin is not decentralized anymore since it went to ASICs

How many manufacturers of ASICs are there? <-- Control them, you control Bitcoin!
They let a few trickle out to keep the illusion that anyone can own one.
Just see who Yifu/Avalon now works for and their goals.

Litecoin is decentralized because anyone can mine with off the self PC parts. Litecoin was designed to keep FPGAs/ASICs out of the game, and keep the printing press in the hands of the people.

[Walter Rothbard]

Bitcoin is not decentralized anymore since it went to ASICs

Prior to ASICs, I was not mining Bitcoin.  Now I own ASICs and am hashing away.  At least from my point of view that means less centralization of Bitcoin.  I would assume lots more small players like myself have been able to get into Bitcoin thanks to ASICs, but maybe I'm wrong.

[crumbs]

Bitcoin is not decentralized anymore since it went to ASICs

Prior to ASICs, I was not mining Bitcoin.  Now I own ASICs and am hashing away.  At least from my point of view that means less centralization of Bitcoin.  I would assume lots more small players like myself have been able to get into Bitcoin thanks to ASICs, but maybe I'm wrong.

Hashing with a couple of GH/s is not the same as hashing with 51% of the network hashrate.
Commercial farms & mining pools (virtually a necessity for private miners) are much more likely to grab that 51% today than they ever were.

[Walter Rothbard]

Bitcoin is not decentralized anymore since it went to ASICs

Prior to ASICs, I was not mining Bitcoin.  Now I own ASICs and am hashing away.  At least from my point of view that means less centralization of Bitcoin.  I would assume lots more small players like myself have been able to get into Bitcoin thanks to ASICs, but maybe I'm wrong.

Hashing with a couple of GH/s is not the same as hashing with 51% of the network hashrate.
Commercial farms & mining pools (virtually a necessity for private miners) are much more likely to grab that 51% today than they ever were.

And the solution to that is the same as it always was.

[BitchicksHusband]

Explain me Like I'm 5

OK, Johnny.  See this nickel?  Well on the computer there are pretend nickels...

Wait, come back!  This is really interesting!  You can ride your bike later...