A prominent figure in the cryptocurrency investment sector is calling for the community to take a firm stance against centralized blockchain frameworks, asserting that permissioned architectures contradict the fundamental principles of the crypto movement.
Blockchains exist on a spectrum of decentralization, with a crucial distinction being whether consensus participation is open to anyone. In truly decentralized networks, any participant can validate transactions based on transparent protocols, commonly utilizing Proof-of-Work or Proof-of-Stake mechanisms that leverage economic incentives tied to tokens. In contrast, permissioned systems confine validator roles to selected entities, closely resembling Proof-of-Authority models that rely on trust in specific actors.
While centralized designs may offer advantages such as enhanced performance and regulatory compliance, critics argue that they compromise key attributes like censorship resistance, credible neutrality, and immutability.
Justin Bons, founder and Chief Investment Officer of Cyber Capital, argues that several well-known networks should be dismissed by the crypto community due to their centralized characteristics. He specifically highlights Ripple”s Unique Node List, which he claims effectively results in permissioned validators. He points out that deviation from this centrally managed list could lead to network forks, thereby consolidating power with the Ripple Foundation and its affiliates.
Similar concerns apply to Stellar, where the Stellar Development Foundation publishes a list of recommended Tier 1 organizations. This practice creates significant overlap among validators and places substantial authority in the hands of the list”s curator.
Bons also categorizes Canton and Hedera as completely permissioned at the validator level. Meanwhile, Algorand maintains certain centralized features through its permissioned relay nodes, although the accessibility of participation nodes has improved following the rollout of a peer-to-peer transaction propagation method. Bons expresses uncertainty about the necessity of relay nodes in the current structure.
For Bons, the distinction is clear: a blockchain must be entirely permissionless or it fails to meet the core ethos of the cryptocurrency movement. He argues that reliance on authoritative figures undermines the very reason for the existence of crypto.
He likens institutional hesitance towards open networks to the skepticism faced by the early internet, predicting that as the sector evolves, decentralized platforms will ultimately gain prominence, redistributing power away from centralized entities.
