Can’t we have both Scalability and Decentralization Under One Umbrella?

It is generally accepted that for blockchain technology, the hindrance to widespread understanding, adoption, and utilization is the lack of scalability.

‘Scalability’ refers to the ability of a decentralized network to accept many equal participants, while ensuring that the number of transactions it can process stay large enough for meaningful use.

Since the tectonic shift that was Ethereum in 2014, blockchains have typically relied on forms of centralization and non open access to scale.Perhaps turning the focus to voting protocols, delegation, and/or ratcheting as necessary.

While it is true that the overwhelming majority of blockchain companies claim their networks are decentralized, only a minority of them achieve any meaningful degree of decentralization. Instead, they emphasize scalability and speed. Think about Ripple, which many regard as a centralized entity behind the XRP token.

As per the Crytpoasset Taxonomy Report, only 16% of blockchain are truly decentralized, with the rest of them being either centralized of semi-decentralized.

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I spoke with CasperLabs about why they believe it to be technically inappropriate and unnecessary to compromise decentralization in favor of scalability.

Their general premise was that tracking provenance of data controlled by a single trusted private entity or a group had largely been solved by innovations in databases. The key is to enable public ownership/access of infrastructure.

The company, acting as an R&D organization, is currently working on a fully decentralized, sharded, and scalable distributed ledger technology (DLT) that will rely on a groundbreaking proof of stake protocol, CBC-Casper that extends and augments decades of research into byzantine fault tolerance

Back on track, CasperLabs is inspired by Ethereum’s best features, providing a powerful PoS technology and mass scalability.

Vlad Zamfir, lead architect at CasperLabs and researcher at the Ethereum Foundation

Excitingly enough, the network’s infrastructure is designed by a research and development team led by CEO Medha Parlika and Lead CBC-Casper Architect Vlad Zamfir who is also a researcher for the Ethereum Foundation. While Vlad Zamfir doesn’t actively code on the new blockchain, he is acting as a researcher and is generating protocol specifications.

According to the company, the ideal consensus would have the following characteristics that CBC Casper meets:

  • A simple and shared consensus safety proof
  • Flexibility to develop consensus protocols on top of new data structures
  • No necessitated in-protocol finality threshold
  • Open and permissionless access
  • No delegation; i.e., no classes of participants

In his collaboration with CasperLabs, Zamfir believes that “the technology promises to scale the Blockchain without sacrificing decentralization through proof of stake consensus, and by removing the mining required by traditional proof-of-work protocols, it will be more ecologically and economically efficient and secure.”

Zamfir is hinting that Bitcoin’s PoW is literally affecting the environment, as miners need much energy for the computational processes carried out by GPUs and ASICs. Alex de Vries, a blockchain analyst at PwC, warned two years ago:

“The energy-consumption is insane,” he told me. “If we start using this on a global scale, it will kill the planet.”

“Proof of work systems spend about 90–95% of the underlying computational resources generating random numbers,” commented Mrinal Manohar, co-founder of CasperLabs and CEO of parent company, ADAPtive.

“Unfortunately once generated these numbers have no forward looking utility, which makes the system inherently wasteful. Wasteful systems tend not to work; I’m loathe to play into politics and talk about resource constraints, I’d rather just say efficiency is a good idea in general. Permission-less decentralized proof of Stake is efficient and secure when done properly.”

CasperLabs has made significant investments researching the best approach to developing a fully decentralized and scalable blockchain. CBC-Casper is part of CasperLabs immediate roadmap and considered as a potential consensus protocol for Ethereum. Many CasperLabs team members were early investors in Ethereum, not to mention Vlad Zamfir, who is a researcher at the Ethereum Foundation.

But, how does CasperLabs plan to collaborate with Ethereum, if at all? I was definitely curious on that one.

“Linux is pretty great because in spite of the myriad forks, directionally there was a focus to create something great and collaborate, rather than focus on petty competition or palace intrigue,” Manohar responded.

“Ethereum was a genius tectonic shift not since replicated in our industry and a lot of us at CasperLabs have been seed investors and supporters of that project since its inception. Our entire code repository on Github is open source and available to everyone. If there is any part of our build that is useful to Ethereum or any project that supports the open source and decentralization ethos, we’d love to share. This is an open invitation. CBC-Casper is an important and evocative technology which needs to be implemented.”

This weekend, CasperLabs is teaming up with CryptoChicks at the Cryptochicks Hackathon + Blockchain, AI Conference, a major blockchain and A.I. event to be held at RBC WaterPark Place in Toronto, Canada. The event includes panel members like Zamfir and Ethereum’s Vitalik Buterin.

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