In his recent tweet, which addresses a Reddit post by Bitcoin Core developer Greg Maxwell, Charlie Lee claims that one cannot fix the 51 percent flaw without making the Bitcoin network more centralized. According to the Litecoin creator, this is essential to understand for those who want to understand the O.G. cryptocurrency and the concept of decentralization.
Read Greg Maxwell’s explanation about why one cannot fix the 51% attack flaw of a decentralized system without adding centralization.
— Charlie Lee [LTC⚡] (@SatoshiLite) October 6, 2019
A needed trade-off
The OP who started a heated discussion asks whether it is possible to make the Bitcoin network less vulnerable by rewriting the software to cap a miner’s percentage of the hash rate. In his lengthy comment, Maxwell explains why it’s impossible to eliminate the possibility of a 51 percent attack without turning Bitcoin into a centralized system like Ripple, EOS, or IOTA. Using computing power to vote (instead of relying on a centralized party) makes it possible to achieve decentralization.
A decentralized system like Bitcoin uses a public election. But you can’t just have a vote of ‘people’ in a decentralized system because that would require a centralized party to authorize people to vote. Instead, Bitcoin uses a vote of computing power because it’s possible to verify computing power without the help of any centralized third party.
As reported by U.Today, Binance CEO Changpeng Zhao suggested reorganizing the Bitcoin Blockchain after a $40 mln hack in May, but he quickly backpedaled on his plan after facing relentless criticism from the crypto community.
The bigger problem
Nearly 70 percent of the hash rate is controlled by China. Considering that its authoritarian government has already banned Bitcoin, this concentration of power raises many questions about the future of Bitcoin.
However, according to Maxwell, a hypothetical attack on the Bitcoin Blockchain by a group super-powerful miners is not the biggest problem faced by the top cryptocurrency. He states that it would be far riskier if the coin’s users never cared to protect its decentralization properties.
A far bigger risk to Bitcoin is that the public using it won’t understand, won’t care, and won’t protect the decentralization properties that make it valuable over centralized alternatives in the first place.
Meanwhile, Bitcoin’s hashrate continues to print new highs, thus making the network more robust.
The Blockchain trilemma
Numerous cryptocurrency projects have tried to solve the so-called “Scalability Trilemma” to no avail. IOTA has moved there a tad further by managing with the Coordicide upgrade, but it’s not clear when exactly it will implement this solution and completely get rid of the centralized Coordinator.
What’s your take on the hypothetical 51 percent attack? Feel free to leave your comment!