Daily Crypto, Finance, and Tech News Summary – October 9, 2023

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Welcome, and thank you for being part of the MyZucoins community! Let’s get into an interesting piece of crypto, finance, or tech news to stay ahead.

Depiction of a decentralized society

Decentralization In Crypto: A Goal Misunderstood

In the world of cryptocurrency, decentralization is more than just a method of governance—it’s become an ideal, a goal almost every blockchain project aims for.

The term ‘progressive decentralization’ is used by Jesse Walden, cofounder of VC fund Variant and his newly hired crypto lawyer, Jake Chervinsky.

It illustrates the necessity of gradual decentralization instead of a rushed process, often seen in crypto.

Teams frequently try to speed through the initial stages—creating and then decentralizing a product too early.

Many products must have leadership while finding their place in the market.

A premature rush of decentralization has often been driven by a quick-profit motive rather than a true belief in Satoshi’s vision (the anonymous name of the creator of Bitcoin).

Walden acknowledges that some projects are not suitable for decentralization at all.

Chervinsky highlights that corporations and democracies have historically been the most effective structures for decision-making, due to their mostly centralized hierarchy of control.

The term “decentralization” has been overused to justify poor product design, lack of refinement or hide less-than-noble intentions.

Despite the challenges, successful decentralization is not impossible—Bitcoin proved this.

But it’s a tough task.

Amidst the media frenzy on other matters, the crypto industry keeps building, reminding us that the quest for truer decentralization continues. Read more here.

More On This Topic:

Blockchain’s 51% paradox: Power, trust, and the fight to keep decentralization. 

Dangers of the underlying crypto token when projects and assets surpass the value of the actual crypto itself.

Industry still isn’t close to solving the “blockchain trilemma.”

High US concentration of Ethereum nodes raises decentralization concerns.

Centralization threatens blockchains.

How Do You Decentralize A System?

The Zucoins project team has been hammering away at the extremely tough problem of real decentralization for years.

All decentralized systems, whether those that occur in nature or in technology, all start out centralized, and then decentralize over time.

Bitcoin’s first user was likely either a single person or a very small group of people, who created the early blockchain network.

It had to run on one person’s computer to start with, where it was developed.

Then, as others use it, the diversity expands, creating more resilience.

More use cases and applications would likely follow too.

Each milestone along this growth path increases areas of decentralization along the way.

Take the following example.

There are two people on an island.

A boat arrives and a third person arrives on the island.

To communicate with the two local people, the third person needs to learn the island’s language from one of those two people.

Fast-forward to 1,000 people arriving on that island.

The 1,001st person that arrives can now learn the island’s language from 1,000 people, not just two.

So, this is clearly more decentralized than it originally started out.

There’s no fine line to measure whether something is decentralized, but there are indicators.

The more there are different people, getting things from different places, the more decentralization there is.

Zucoins is following this approach—to increasingly decentralize components as they are completed and standardized, all the while remaining flexible enough to grow with future changes to technology, society and regulations.

As you can probably figure out by now, there’s a whole lot to consider to get this right.

As an overview, there are four main components.

Firstly, the transactions themselves are formed, processed, and validated by individual users, in and amongst themselves.

Secondly, to decentralize the Splitchain network and make it relatively easy for others to manage their own nodes and participate in the network, without a high bar for entry (else this causes centralization over time—currently happening with traditional blockchains).

Thirdly, to decentralize the Zucoins wallet app. The focus lies on creating a user-friendly experience, starting with the wallet app, where others can make their own version of it, with their own needed features.

Fourthly, to decentralize the governance structure, opening it up beyond the current Zucoins project team.

Over time, each of these components will be released to the public, with a methodical and lower-risk transition toward decentralization.

It adds to the significant milestone accomplishments made by the Zucoins project team, demystifying the complex world of crypto and making it more accessible to everyday people.

The technology has to not only be innovative, but also comprehensible and usable.

All of this helps different aspects of true, long-term, and sustainable decentralization.

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All the best,
Peter & Rob

Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.