Bitcoin’s value proposition relies on its ability to resist any type of censorship. Without that feature, Bitcoin loses its power to challenge and resist any authority that wants to subjugate Bitcoin to the same rules that apply in the traditional world. With this in mind, it’s paramount that bitcoin has no central points of failure whatsoever. If there is a gatekeeper, there is a vulnerability. If there is a vulnerability, it will be exploited. And at that point, Bitcoin as an exercise of free and decentralized digital money simply stops.

To ensure the network’s decentralization, robustness and anti-fragility, we need to maintain the very components that assure us, through time-tested battles, of these very properties. No entity in the world can feel like attacking Bitcoin will be a successful endevour. The best way to do that is to spread Bitcoin as far as possible to all corners of the globe by running nodes. Just like a monetary virus. The more it spreads, the higher the chance it succeeds.

Satoshi mentioned several times that all the former electronic money projects failed due to their centralization features. A monopoly on the supply of money is a power that governments and the financial system will not let go easily. To make sure that Bitcoin will not be stopped by any bad actor, it’s our duty to ensure that Bitcoin’s decentralization increases all the time. Forever.

A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.

Bitcoin open source implementation of P2P currency

https://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currencyhttps://www.indianapolismonthly.com/news-and-opinion/business/mad-money/

Looking thoroughly at what Bitcoin accomplished so far and where it is right now as a global network, it’s a fact that the network is very decentralized. Nevertheless, just like one can argue that bitcoin´s purchasing power doesn’t have a top, bitcoin’s decentralization level also doesn’t have a top. The more, the better! Beyond a certain level of decentralization, any attack on Bitcoin is not only pointless for the attacker, but also detrimental, since the attacker’s failure ends reinforcing bitcoin’s capability to resist any attack, strengthening the network in the process, while diminishing the perceived success of any attempt of attacking Bitcoin. Anti-fragility in its purest form!

Hydra – mythological figure from the Book of Revelations. Every time one of the heads got chopped off, the Hydra would regrow two heads. Every time the Hydra got attacked, the Hydra grew stronger. The Hydra is anti-fragile. Bitcoin is a monetary Hydra.

What’s the level of decentralization that assures that any potential attacker is completely disincentivized from attacking the network? No one knows for sure. We can only estimate it. Nonetheless, the best strategy is to just decentralize bitcoin as much as we possibly can. And the most important tool that we have at our disposal is running as many nodes as possible all around the world.

Nodes fulfill one of the most, if not the most important role in Bitcoin. By following the protocol rules, they verify and validate all the transactions and all the blocks that get propagated throughout the network. They also relay all this information to other nodes and store all blocks published by miners. If a transaction, block or other piece of information violates the consensus rules of the protocol, nodes automatically reject it. Nodes are essentially the referees of the bitcoin game, making sure that everyone plays fair like they are supposed to.

Bitcoin nodes working

If more nodes join the network, more referees will be verifying everything that happens in Bitcoin. If more nodes join the network, there will be more copies of the entire blockchain. If more nodes join the network, more assurances there will be that every actor behaves the way it should. Every time a node joins the bitcoin network, anyone that wants to attack it will have to chop off an extra head in order to kill this monetary Hydra called Bitcoin. If you don’t run a node yet, it’s time to do your part.

Unfortunately, and unknowingly to the majority of bitcoin users, the vast majority of miners do not run a node nowadays. Providing valid shares to the pool operator is all that’s necessary to get paid for their work. It’s commonly said that miners are being paid by the network to protect it against all adversarial attacks by building a wall of energy so dense that it’s impossible to penetrate it. However, if we want to continue with this analogy, what we observe is that miners are employees of the pools, not of the bitcoin network. There is no direct connection between miners and the network. Miners are effectively selling computing power in the form of hashrate to the pools. The responsibility of picking the transactions that go in the block, creating the blocks themselves, propagating said blocks found throughout the network and receiving all the necessary information gets delegated to the pools. This effectively means that Pools are the ones censoring, or not, the network and thus undermining Satoshi’s original vision of an open and permissionless protocol for value transfer.

Furthermore, if the level of decentralization hadn’t been reduced enough just by that, there are proxy pools. Proxy pools are basically a wolf maskerading in sheep’s clothing. Same pool, but a different brand. This means that if some big Pool A has 20% of the Hashrate, but 3 smaller Pools B, C and D have 5% each, effectively Pool A controls 35% of the hashrate. That would be enough to do a Selfish Mining attack and harm the network. Thus, what we end up with is just a couple of “main” pool nodes deciding which transactions make it to the blockchain. This situation doesn’t look very decentralized. That’s because it isn’t. Thankfully, there is a way to fix this. It’s called Stratum V2.

Stratum V2 is a new mining protocol that hopes to bring a series of new features that make Bitcoin mining more secure, more efficient and of course, more decentralized. Its reference open-source implementation was developed by an independent, community-run of more than 15 developers over the past three years, battle-tested with more than 30 000 downstreams. With this new protocol, Bitcoin’s decentralization can reach new heights. How, you may ask? By giving miners the ability to create their own block templates and pick the transactions that get included in blocks. To have this capacity, miners must run a node. More nodes means a more decentralized and robust network. Once all miners are the ones building blocks rather than pools, we can finally witness Bitcoin taking another step towards invincible decentralization.

DEMAND pool is the first mining pool to implement the reference implementation of the Stratum V2 protocol. Our mission is to first and foremost, contribute to the network’s decentralization and to end the threat of censorship on Bitcoin. If you’re a miner and want to be in the drivers seat, consider joining our pool. Lifetime special conditions and other features will be available for founding members of our pool.

It’s time to improve Bitcoin’s decentralization. Are you coming? 

This is a guest post by Francisco Monteiro. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Let me be honest—becoming a wholecoiner is one of the smartest moves you can make, but it’s also becoming ridiculously hard. I remember when I first got into bitcoin back in 2016. The price was around $400-$500, and owning one full bitcoin felt totally doable.

Now? It’s a completely different story.

Bitcoin is sitting near $100,000, and owning even half a bitcoin feels out of reach for most people. Let’s put this into perspective: the average savings for someone under 35 in the U.S. is just $20,540. That’s not even 25% of what it costs to buy 1 BTC today. Most of these millennials and zoomers can only dream of ever owning a whole bitcoin—it’s just not realistic for the average person anymore.

And here’s the part that really blows my mind: there are only about 1 million bitcoin addresses that hold more than 1 BTC. Even if we assume every single one of those addresses belongs to a different person (which isn’t true), that’s just 0.0125% of the global population. Think about it—being a wholecoiner already puts you in one of the most exclusive clubs in the world.

Now, let’s compare that to fiat millionaires. There are about 58 million millionaires worldwide. And here’s the kicker: there are only 21 million bitcoin in total. Even if every single millionaire on the planet wanted to own one bitcoin, they couldn’t. There’s just not enough bitcoin to go around. That’s why being a wholecoiner is better than being a fiat millionaire. Fiat is infinite—anyone can become a millionaire in a system where money is endlessly printed. But bitcoin? It’s hard-capped. Scarce.

If you’re a millionaire and you don’t own at least 1 bitcoin yet, wake up. The race is on, and most millionaires are going to miss out. And if you’re already a wholecoiner? Congratulations. You’re part of the 0.0125% who will ever own this much bitcoin.

It might not feel like a big deal now, but in 20 or 30 years, you’ll look back and realize how rare and special it is. As Tuur Demeester said: “These are the last months that 1 BTC is accessible to the upper middle class.” That quote stuck with me because it’s true. The window is closing.

If you’re in the race, don’t stop. And if you’re on the sidelines, it’s time to get moving—because bitcoin’s scarcity is going to leave a lot of people behind.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.