Decentralization vs Federation for dapps
Bitcoin and other cryptosystems have really put a highlight on decentralization. On a quite side, I have seen mastodon to really shine with its federated approach. I want to discuss decentralization vs federation for social networks. I define decentralized as a network where everyone is doing the same thing. While in federated, anyone can run centralized social networks and choose to federate with others. In decentralization, there is often a cryptotoken with decentralization by default. In federation, nodes are often run on donations and federation is a choice. It seems federated networks are therefore more scalable than decentralized. Ethereum dapps generally have the system of "everyone verifying" while federation follows "you choose who verifies". What are some thoughts on decentralization vs federation for dapps?
<p>i believe decentralization is more suitable where <strong>consensus</strong> is critical, such as bitcoin. While social network don't need to agree upon something.</p><p><br></p><p>Though I would want to explore this further.</p>
<p>Real decentralization is very difficult to achieve, and typically very costly. Some things are currently not possible to achieve with real decentralization like price oracles used in smart contracts.</p><p><br></p><p>Something that is federated can be decentralized to some extent if the power to control it is split between actors. Like the power of the federated peg of the Liquid sidechain is split between a high number of actors so that although the system is not trustlessly automated, it is decentralized to some extent.</p><p><br></p><p>I think there is a continually blurry and moving line between what is truly decentralized and what is federated. Even the Bitcoin network can be changed if everyone agrees to do so, but at the moment it is decentralized in power so much that we can say it is effectively decentralized.</p><p><br></p><p>What you say that federated networks are more scalable than decentralized is true. However, if its decentralized nature is important for its adoption (which might be the case for a global payment network like bitcoin), then the federated network might have difficulty scaling its market share. Look at the digital chinese yuan. Many people would be turned off from using it as the chinese government effectively will have absolute control over their money. Scaling it up technically will of course be easier.</p><p><br></p><p>When it comes to deciding on whether or not something needs to be decentralized, or if it can be federated you should look at how important it is that the system is decentralized, and whether or not there will be incentive enough to keep the system honest if it is federated. A weakness with federation in addition to the possibility of corruption is that the people in charge lose interest and/or in other ways disappear.</p><p><br></p><p>Mastodon is federated, but since the project is open source software there is protection against malicious take-overs because you can always just create a new instance. The interlinked network of mastodon instances decentralizes the power of the social network as a whole.</p><p><br></p><p>There are disadvantages to both types of system, and both types are vulnerable to the number of participants in the network. A federated network will stop working if nobody is there to donate or otherwise incentivize the maintenance. A decentralized system will similarly become less decentralized if there are fewer actors involved in the distribution of power. If a system is very small then it cannot be truly decentralized, so an attempt to achieve it through automation would be wasteful. Here, power can be decentralized through the reputation of its participants, and you can use game theory to evaluate the probability the actors in power will stay honest.</p>
<p>Decentralized networks allows for freedom of choices while federated can enforce a certain option. Both are good and bad in the same way. </p><p>Technically speaking my vote goes with decentralized environment but I would like to have a back-up (someone should be accountable in case of rug pul). And this will lead to federated network so you have it. </p><p>Still newbie in this, hope it helps you</p>
<p><span style="background-color: rgb(255, 255, 255); color: rgb(43, 43, 43);">Decentralized Finance is the fastest growing sector of the crypto market. With promises of a consumer-centric, open source, and permissionless financial system that is transparent to all, DeFi stands to change the trajectory of consumer and institutional finance. Borrowing, lending, insurance, and direct peer-to-peer exchange are just a few of the use cases that are being disrupted by this new financial paradigm, taking out costly intermediaries and delivering more value to end consumers.</span></p>
<p>A decentralized application (dApp) is a type of distributed open source software application that runs on a peer-to-peer (P2P) blockchain network rather than on a single computer. While In federation, nodes are often run on donations and federation is a choice. It seems federated networks are therefore more scalable than decentralized.</p>
Post your answer
Sign in to post your amazing answer.