general sense, decentralization means that no single entity has exclusive
control over data or processes. This scares China and the European Central Bank
to death and it is why they are anxious to slap
restrictions on DLT.
blockchains provide a basic level of decentralization because transactions are
recorded by all users on the blockchain network. Any changes to the transaction
record must be confirmed by the vast majority of blockchain users in order to
be recognized as legitimate.
single user or small group of users were to try to manipulate blockchain data
in a way with which a majority of the network disagreed, their efforts would be
thwarted by the rest of the network. This is one of the features that make
blockchain technology so powerful.
also a feature that distinguishes blockchains in a crucial way from traditional
databases, in which all records are stored in a central location. That location
is usually controlled by a single party, who has the power to modify records
without consulting anyone else. For privacy, this single party must be blindly
trusted by everyone to protect the private information they store and not use
it for gain without consent. Databases can and have been the single point of
failure by which malicious actors attack, compromise, steal and profit off the private
information they contain.
Decentralization + Privacy and Governance
decentralization is complex and nuanced. Decentralized transaction records — a
feature that all blockchains provide — do not necessarily mean that a
blockchain is decentralized in other respects.
example, on some blockchains, platform governance is largely centralized, even
though transactions are decentralized. Bitcoin is probably the best example of
such a blockchain. Bitcoin lacks a formal governance model, which essentially
leaves Bitcoin developers with outsize influence over changes to the Bitcoin
protocol and platform. While the developers don’t have exclusive control, they
enjoy more influence than users and miners. At the same time, miners do all the
work for Bitcoin and can join forces to embargo any proposal that has a
negative effect on their income.
cases, governance is decentralized to a certain extent, but not fully. For
instance, on the Dash platform, masternodes hold voting rights. There are many
masternodes, and in theory, anyone can create a masternode. But because doing
so requires considerable resources, not all users are able to participate in
governance. Dash governance is decentralized in the sense that it is not
controlled by any single party, but it is also privileged because only a
portion of the community can participate in governance.
also important to note that decentralization should not be conflated with
privacy. It is possible for a blockchain to operate in a decentralized way but
without guaranteeing the privacy of its users. Bitcoin also serves as an
example in this case because, by default, Bitcoin transactions can be traced. A Bitcoin transaction that is
decentralized is not also private, unless it is specifically designed to be
private via add-ons to the Bitcoin platform.
Particl’s Approach to Decentralization
takes a more aggressive approach to decentralization that demonstrates how a
platform can be fully decentralized while maintaining privacy and reliability
at the same time.
no mean feat. Typically, decentralization comes at the expense of privacy and
reliability, particularly on an ecommerce platform like Particl’s. When you
remove a central authority from a platform, there is no one who can address
threats to privacy or intervene when a transaction dispute occurs. However,
Particl implements several techniques that allow it to square this circle and
provide complete decentralization without compromising other important
is built on top of Bitcoin, which guarantees transaction decentralization. But
Particl adds several other features that take decentralization several steps
further. They include:
model. Anyone who
holds tokens on the Particl platform can propose changes to the platform
and vote on proposals. Proposal and voting rights are directly equivalent
to the amount of tokens that one holds. This approach ensures that no
single user or group of users enjoys more governance power than others. In
addition, users do not need to meet a minimum investment threshold in
order to participate in governance.
escrow. Particl uses
the Mutually Assured Destruction (MAD) escrow technique to guarantee the
reliability of transactions without compromising privacy. MAD escrow does
not increase decentralization; escrow is a separate issue. However, it
ensures that users can count on transactions to proceed as expected,
without having to rely on a central third party to oversee them.
and Confidential Transactions. Particl also implements RingCT and Confidential
prevent transactions from being traced. This feature also adds privacy to
the platform without requiring third-party oversight.
communication tools. In
addition, Particl offers private communication tools like end-to-end
encrypted chat for users. While these tools are optional, they make it
easy for members of the blockchain network to discuss transactions or the
platform without worrying about third-party interference.
serves as an example of what a fully decentralized blockchain looks like while
keeping privacy as its DNA. It goes above and beyond the basic decentralization
provided by blockchains like Bitcoin and manages to protect privacy and
transactions at the same time.
Disclaimer: Particl is a client of BTC Media, which