Vitalik Buterin - The Advantages of Decentralization - EventHorizon 2017
So what is decentralization, anyway? (6:08)
- Architectural decentralization - is it one physical system or many physical systems?
- Political decentralization - is it controlled by one person or entity or many?
- Logical decentralization - is the interface or data structure a singleton, or an amorphous swarm?
Why decentralize? (11:07)
- Fault tolerance - use redundancy to reduce risk of a system failing accidentally
- Attack resistance - cost of attack sublinear, so splitting a system into components makes attacks more costly
- Collusion resistance - making it more difficult for a sub-group of community to act in its own benefit at everyone else's expense
- Efficiency (sometimes) - decentralization may be more efficient due to diseconomies of scale or spare capacity considerations
What might we decentralize? (25:05)
- Production of energy
- Distribution (ie. making and maintaining ires)
- Source authentication (eg. is the power green? Is it financing any nasty dictators?)
- Market mechanisms (ie. allocation and incentivization)
Blockchains seem most well-suited for markets, though we can also think about source authentication.
How can decentralization help? (27:10)
- Fainess
- Proving a market/auction algorithm is fair: 60 years of game theory
- Proving that the fair algorithm was the one that was actually executed: what a blockchain can do - Privacy preservation
- No central point of data collection
- Reduced incentive to create a point of data collection
- Blockchians transparent by default but privacy can be added via crypto, eg. ZKPs - Privacy isn't just about big brother paranoia, it's a critical requirement for fame-theoretic incentive compatibility of many classes of mechanisms!