Is The Ethereum Merge Bad For Its Decentralization?
Ethereum, one of the most well-known blockchain networks, has come under heavy fire for its growth. According to others, Ethereum’s oligarchy-like growth poses a danger to the decentralization of the platform.
One of the most well-known blockchain networks now in use is Ethereum. It was developed in 2013 by Vitalik Buterin and has since evolved into one of the most expensive cryptocurrencies.
In order to improve scalability and performance, Ethereum was among the first to use smart contracts and other cutting-edge technologies like Plasma and Sharding.
What Is Ethereum Hard Fork? Reasons Why It Happened & Whom It Affected:
Several Ethereum investors and fans have posed this question. The recent Ethereum hard fork, which produced two distinct coins, is the primary cause of this.
The initial iteration includes the initial chain and is referred to as Ethereum Classic, ETC. The people who opposed the hard fork created the second version, which goes by Ethereum (ETH).
The primary cause of this was a 2016 attack on a DAO (Decentralized Autonomous Organization). Due to this, some individuals were able to steal ether valued at millions of dollars, which they then used to purchase additional ether on other exchanges.
This sparked a great deal of debate among the community since some felt that DAO should be allowed to collapse, and others felt that hackers shouldn’t be allowed to make money from their crimes.
After great deliberation, the majority chose to proceed with the hard fork to put the stolen money back in the hands of its rightful owners. This meant that everyone who purchased ETC during this period would also receive a refund of their money and any new ETC coins created after this period.
Ethereum’s Hard Fork Might Have Serious Consequences For The Network:
The hard fork, which is expected to take place in October, will combine two upgrades: EIP 1014, which increases Ethereum’s sharding capacity by allowing each node to store only the state of the shards it participates in, and EIP 1234, which aims to make the network more efficient by lowering block rewards from 3 ETH per block to 2 ETH per block.
Even though some Ethereum developers think this choice would help ease worries about the network’s centralization, others have suggested that it may worsen matters.
More than only EIP 1234 or EIP 1014 are at issue in the continuing discussion of whether or not Ethereum should combine these two improvements; developers have debated how much data keeping on-chain should be permitted for months.
However, there will always be questions about whether Ethereum can keep its decentralized character as long as these conversations go on without conclusive solutions.
How the Amount of Decentralized Applications Will Shape the Future of Ethereum:
Dapps, the decentralized applications that run on Ethereum, depend on maintaining their integrity and security. These Dapps grow more secure as more users use them.
Therefore, the more individuals who use an application like CryptoKitties (which enables users to purchase collectible digital kittens), the better it gets for everyone else. Decentralized systems function in this way.
However, if developers produce an excessive number of Dapps, they will begin to compete with one another for resources like bandwidth and storage space, among others.
Individual Dapps may find it more challenging to succeed due to competing for resources rather than working together to develop their platforms. Thus, this fosters a climate where developers are encouraged to produce new Dapps even if they aren’t necessary or if someone else may utilize them in the future.
Can A Blockchain With Several Nodes Be Truly Decentralized?
The main question is whether a blockchain with several nodes can still be decentralized.
The response is no. Although there are a few outliers, most of them, like Bitcoin and Ethereum Classic, are constrained by their quantity. However, these two are still not entirely decentralized despite having just 1–2 nodes controlling the network.
Let’s examine the situation with Ethereum Classic (ETC). There are now roughly 18 mining pools for ETC, and each one accounts for 20% of the total hash rate. Therefore, if we simply consider these pools, we obtain more than 80% of the overall hash rate!
Additionally, this excludes any other miners who choose not to participate in any pools or to disclose their knowledge to others. It’s hard to estimate the overall number of miners, but we know that they are numerous enough to impact the network and make choices that might have a ripple effect across the community (or even just one person).
Why Some People Worry About One Group of Developers Controlling Ethereum:
Critics claim that involving one group of central developers under challenging choices regarding how to run the system violates the point of a blockchain.
Some contend that to create a hybrid blockchain, Ethereum should combine PoS and PoW. This would enable holders of Ether to voting on significant modifications to the consensus rules while allowing the miners to continue contributing to the network.
Some people worry more about the possibility of one group of developers owning Ethereum. They contend that involving one group of central developers under challenging choices about the system’s operation violates the purpose of a blockchain.
It’s important to remember that Ethereum has only ever had one development team working on it, but, up until this point, this wasn’t necessarily a bad thing as they didn’t have to make any problematic system management choices.
For instance, even if other developers disagree with his choice, Vitalik Buterin could simply make the change if he decided today that he wanted to make it to the code base of Ethereum.
This is precisely what occurred when Buterin initially decided against including replay protection during the Constantinople hard fork and then changed his mind in response to criticism from the community.
The issue is: How can we believe in our leaders if they make decisions of this nature?
The answer is simple: We can’t. And for this reason, a lot of people believe Ethereum will eventually collapse because its top executives keep making bad decisions that undermine the decentralization that the platform depends on.
However, if Ethereum fully decentralizes following its merger with EOS and other initiatives like TON, the scenario will drastically alter (Telegram Open Network). As a result, everyone who wishes to participate actively in the community will be free to do so without fear of being muzzled by a higher authority.
Why Some Developers (and Users) are Against the Ethereum Name Service Merger:
According to its proponents, the change would increase the utility of both blockchains, particularly for DeFi applications. There hasn’t yet been an explicit agreement within the Ethereum community, which is divided on the issue.
There are several arguments against the merger, but one of the strongest is that decentralization may suffer.
For instance, if two chains join, the network becomes more centralized since the combined blockchain is operated by a small number of validators or delegates. This may be a concern if one of these delegates was hacked by an attacker or government body.
This is why some claim that to compete with other blockchains like EOS and TRON in terms of transactional processing speed, Ethereum should instead concentrate on enhancing its scalability.
Why An Ethereum Address Only Beneath Two Randomly Generated Passphrases Is Impossible To Hack:
Only the public key and address of the user are tracked by the Ethereum blockchain, which only tracks the state of each account. Unable access to this information prevents hackers or other harmful actors from directly targeting an individual to steal money or carry out different forms of attack, making it very difficult for them to do so.
Instead of mining pools or validators, users may be the target of a 51% assault if someone intends to disrupt the network.
This is so that someone may submit an Ethereum transaction, for which they must also give their private key. If someone else gets access to your private key, they will also have access to your funds since it gives them access to the funds in that specific account.
Many people put all of their bitcoin in one location, generally an exchange like Coinbase or Binance, which makes it simpler for hackers to attack them directly (rather than trying to trick someone into sending money from their wallet).
Users are therefore exposed when utilizing centralized exchanges like Coinbase, even if they may not be vulnerable through mining pools or validators while using Ethereum.
Ethereum Classic Hard Fork Unlikely To Stop Attacks On Network:
The danger of cutting the network in half is real, even if only for a short time during which miners have to switch between chains. Miners would move to attack another chain in response to an assault on one chain, but as soon as they do so, they expose their original chain to new threats.
As a result, ETC developers have been focusing on ways to solve these issues, such as by refining gas pricing algorithms for cross-chain transactions (so that transactions will be less likely to fail).
However, there are also worries that these measures could not be enough, especially considering how recent they are and how heavily they depend on the miners’ adoption.
Many ETC developers have advocated for a hard fork — a protocol modification that makes it more difficult for miners to switch chains once an attack has been launched — in response to this worry.
The decentralized nature of Ethereum’s network is a significant feature. Several safeguards are in place to ensure that no centralized entity may use its power to affect how intelligent contracts are paid or executed.
This makes it possible for end users and investors in projects launched on Ethereum to be highly protected. However, this specific feature of the network is in danger because of the Ethereum merger.
By serving as a critical node in the blockchain, Microsoft could exert control over the whole ecosystem, which is inconsistent with the technology’s principles.
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