Centralization in Decentralization

Larimer knew what was coming; he knew that if blockchain based technologies were going to have a fighting chance in the real world POW was not the answer. He had the foresight to see that as cryptocurrency grew in popularity, more people with large sums of money would want to get into the game. As more people with more money entered the arena, they would push out smaller, less technologically advanced miners, and this would eventually lead to consolidation.

Consolidation is a no – no in the world of decentralization, and is especially repugnant to Larimer’s sensibilities. He knew he had to take action. While there were other options out there (POI, POS), they also had their problems, and both were prone to centralization. In 2014, Larimer published a paper on delegated-proof-of-stake; what he was proposing was radical – a blockchain based representative government.

Based on what we know of Larimer, we can assume that money is not his primary motivator; if it were, he could have made systems solely created to enrich himself, his family, and his friends. His disgust with centralization is due to the fact that centralization is a waste of resources; if a few hold all the coins, than the many will suffer. The promise of decentralization was that power would be more evenly distributed, and even small players could have a voice. However, the large amounts of money that started entering the blockchains sphere had attracted bad actors, and with the POW system, there was really nothing anyone could do about it. But Larimer saw the problem and he had a solution.

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