A hot topic

In the field of peer-to-peer decentralized networks is without surprise, decentralization. This word alone is used almost with religious reverence, while "centralized" is a common insult against some competition project. But what really establishes decentralization? Here we have a test of 5 points that can be applied to any cryptocoin.

* Development

The most important and obvious element in this exercise is the development of the currency itself. While the effort towards unified development is useful in terms of consistency and synergy, what matters most here is control: Who is the one who says what is implemented, how and what other inputs are the ones that matter. Also included: How easy is it to remove and replace developers? A team that in theory is completely open to participation by anyone, but actually has a small group in control of the project, with no viable means to exert pressure on them or eliminate them, does not represent a truly decentralized project.

* Financing

The most important thing in the direction and structure of a coin is how the bills are paid. Some sort of independent funding mechanism is needed to ensure that the project does not fall into the undue hands of any rich and powerful external actor. Without funding, development can simply be purchased, or it can be replaced by a larger and more professional team with greater resources.

* Decision making

One of the most observed aspects of cryptocoins is the way in which decisions are made according to the direction of the project. A robust currency can lead to a centralized existence if there is no clear process for the community to express its desires as to the direction of the project. Under such a circumstance, developers can direct the project completely and the community must find a new team or submit to the wishes of the current team. This radical decision eliminates the option of more nuanced action and makes a relatively competent development team essentially do what they want, even if community consensus.

* Maintenance and Mining of the Network

Even if the rest of the project works well without any aspect or person having undue influence, the way the network is run is an important part of the equation. A dream currency that runs almost exclusively through a single "pool" of mining remains centralized through that single point of failure. All that an attacker has to do to damage the network is to run pressure on that pool, or the pool itself could use its only influence to corrupt the coin.

* Ecosystem

Finally, the most observed factor in the decentralization of a cryptocoin is its ecosystem. A currency can achieve decentralization with the other factors mentioned and still be subject to the use of a limited spectrum of integrations. If you own the best currency in the world, the most independent, but you must rely on a single currency exchange to buy it, and you can only use it with a small handful of companies, in addition to having to rely on lightweight wallets, how decentralized can really be your user experience? The final step in establishing a robust resistance to censorship is to fill in as many different avenues to its common use as possible.