Decentralisation is the process of distributing power away from a central organisation or person and instead spreading this control to multiple points.

It’s often seen to be the key differentiating aspect between web 2 and web 3 and is considered important for several reasons, such as giving more control back to individuals rather than organisations; and the ability to handle trust-less systems, whereby participants do not need a trusted third party for a seamless transaction. 

It is not always clear cut however, as it is possible to have decentralised traits while still being controlled by a central organisation. This creates a grey area between centralised and decentralised control and our aim is to explore this and provide some clarity. 

This was the stepping stone for decentralisation, a network made by and for all its users, not just selected organisations or governments. It allowed people to freely explore the internet and helped culture become closely intertwined with tech. Without it, all content could have ended up being reviewed and restricted by a centralised body.

First implemented in 2004 by a computer scientist named Hal Finney, he built upon previous ideas and created a ‘Reusable Proof of Works’. This solved the double-spending problem, the risk that a digital asset could be used twice or more when servers are not synchronised, by keeping a register of the ownership of tokens on a trusted central server. It was designed to allow users throughout the world to verify their correctness and integrity in real-time. 

This was the first decentralised and scalable blockchain, created by the anonymous founder (or founders) known as Satoshi Nakamoto. It improved on previous designs by allowing transactions to be added to the chain without requiring them to be signed by trusted third parties - instead utilising a peer-to-peer network for verification. 

Decentralised networks like Bitcoin do not have a single authority that controls the chain but instead have infrastructure distributed across thousands of computer systems and networks.

Created in 2015 and designed to take the best elements from Bitcoin along with the ability to program and run software on the blockchain. Programmes stored on a blockchain that run when certain conditions are met are known as smart contracts and these enable developers to create apps that run on Ethereum's decentralised network, known as decentralised applications (DApps). 

Smart contracts also help decentralisation by allowing many use cases within a single blockchain. Ethereum is a diversified blockchain, unlike Bitcoin which has a singular focus on financial transactions, and is considered the primary infrastructure for DeFi (decentralised finance) and NFTs. Future growth will likely expand further into traditional markets such as real estate, office productivity, metaverse, social media and event management. 

Ethereum's popularity has caused problems however, including reduced scalability and higher network transaction ‘gas’ fees. This has resulted in numerous competitor blockchains developed with the goal of solving these issues. While most are fundamentally clones of Ethereum, known as Ethereum Virtual Machine (EVM) compatible, others like Solana are uniquely designed in ways that aren't based on or compatible with Ethereum.

This represents a measurable data point to view how decentralised a project is. The more diluted the supply is, the more distributed and spread out among a larger user base, then the less controllable and therefore more decentralised the token is.

Initial token allocations are split into public sale, community, insiders, and foundations. It is generally considered preferable to designate a larger proportion of the tokens for public sale. The chart below shows the initial allocations for most of the current big platforms. 

The number of stored copies of the blockchain is important because it shows how many entities are securing a transaction. For example, there are currently 21 nodes on the Binance Smart Chain (BSC), compared to over 10,000 full nodes on Bitcoin. The number of nodes doesn’t inherently imply a chain is more or less decentralised, but along with supply distribution, it helps clearly define a level of decentralisation.

This can often be the most pivotal characteristic when trying to determine how decentralised a project is. There may be a multitude of nodes, but if all of these nodes are held between a small number of operators, then the project itself is still very centralised. For a truly decentralised project, the power should be distributed equally throughout all participants, ensuring that no one party has majority control. A phrase often heard in reference to power distribution is ‘a 51% attack’, which means that if one entity holds 51% of the power, it allows them to take control of the blockchain and pass any changes without a democratic consensus. Power distribution is something that must be monitored closely.

A good example of how power can be spread equitably across all participants is to use a Decentralised Autonomous Organisation, to create a democratic voting process when changes need to be made to a project. Members are often people from within the community who pledge their token or wallet signature towards a vote. A DAO can be a good solution for community engagement and also help ensure the project is aligned with the views of the community.

An integral aspect to many decentralised protocols and a useful indicator of decentralisation, as it shows the focus is primarily on improving the project rather than maintaining a power base. The responsibilities of a foundation often includes the upkeep of project services, the timely releases of official updates, and nurturing the community surrounding the project, while not being directly attached to the project itself. The Web3 Foundation for example offers development grants, support to the Polkadot and Kusama blockchain teams, and runs free webinars and code camps. 

·   ·   ·

From the origins of the open web and early blockchains to Ethereum’s smart contracts, we have seen that the technology is maturing over time. As more attention is drawn to how many use cases exist it’s likely that decentralised technology will play an increasing part in our future. 

In the next articles we’ll be delving into the details of supply and power distribution, node numbers and token allocation, and investigating whether some of the major platforms that claim to be decentralised actually live up to this. 

Decentralisation is the process of distributing power away from a central organisation or person and instead spreading this control to multiple points.

It’s often seen to be the key differentiating aspect between web 2 and web 3 and is considered important for several reasons, such as giving more control back to individuals rather than organisations; and the ability to handle trust-less systems, whereby participants do not need a trusted third party for a seamless transaction. 

It is not always clear cut however, as it is possible to have decentralised traits while still being controlled by a central organisation. This creates a grey area between centralised and decentralised control and our aim is to explore this and provide some clarity. 

This was the stepping stone for decentralisation, a network made by and for all its users, not just selected organisations or governments. It allowed people to freely explore the internet and helped culture become closely intertwined with tech. Without it, all content could have ended up being reviewed and restricted by a centralised body.

First implemented in 2004 by a computer scientist named Hal Finney, he built upon previous ideas and created a ‘Reusable Proof of Works’. This solved the double-spending problem, the risk that a digital asset could be used twice or more when servers are not synchronised, by keeping a register of the ownership of tokens on a trusted central server. It was designed to allow users throughout the world to verify their correctness and integrity in real-time. 

This was the first decentralised and scalable blockchain, created by the anonymous founder (or founders) known as Satoshi Nakamoto. It improved on previous designs by allowing transactions to be added to the chain without requiring them to be signed by trusted third parties - instead utilising a peer-to-peer network for verification. 

Decentralised networks like Bitcoin do not have a single authority that controls the chain but instead have infrastructure distributed across thousands of computer systems and networks.

Created in 2015 and designed to take the best elements from Bitcoin along with the ability to program and run software on the blockchain. Programmes stored on a blockchain that run when certain conditions are met are known as smart contracts and these enable developers to create apps that run on Ethereum's decentralised network, known as decentralised applications (DApps). 

Smart contracts also help decentralisation by allowing many use cases within a single blockchain. Ethereum is a diversified blockchain, unlike Bitcoin which has a singular focus on financial transactions, and is considered the primary infrastructure for DeFi (decentralised finance) and NFTs. Future growth will likely expand further into traditional markets such as real estate, office productivity, metaverse, social media and event management. 

Ethereum's popularity has caused problems however, including reduced scalability and higher network transaction ‘gas’ fees. This has resulted in numerous competitor blockchains developed with the goal of solving these issues. While most are fundamentally clones of Ethereum, known as Ethereum Virtual Machine (EVM) compatible, others like Solana are uniquely designed in ways that aren't based on or compatible with Ethereum.

This represents a measurable data point to view how decentralised a project is. The more diluted the supply is, the more distributed and spread out among a larger user base, then the less controllable and therefore more decentralised the token is.

Initial token allocations are split into public sale, community, insiders, and foundations. It is generally considered preferable to designate a larger proportion of the tokens for public sale. The chart below shows the initial allocations for most of the current big platforms. 

The number of stored copies of the blockchain is important because it shows how many entities are securing a transaction. For example, there are currently 21 nodes on the Binance Smart Chain (BSC), compared to over 10,000 full nodes on Bitcoin. The number of nodes doesn’t inherently imply a chain is more or less decentralised, but along with supply distribution, it helps clearly define a level of decentralisation.

This can often be the most pivotal characteristic when trying to determine how decentralised a project is. There may be a multitude of nodes, but if all of these nodes are held between a small number of operators, then the project itself is still very centralised. For a truly decentralised project, the power should be distributed equally throughout all participants, ensuring that no one party has majority control. A phrase often heard in reference to power distribution is ‘a 51% attack’, which means that if one entity holds 51% of the power, it allows them to take control of the blockchain and pass any changes without a democratic consensus. Power distribution is something that must be monitored closely.

A good example of how power can be spread equitably across all participants is to use a Decentralised Autonomous Organisation, to create a democratic voting process when changes need to be made to a project. Members are often people from within the community who pledge their token or wallet signature towards a vote. A DAO can be a good solution for community engagement and also help ensure the project is aligned with the views of the community.

An integral aspect to many decentralised protocols and a useful indicator of decentralisation, as it shows the focus is primarily on improving the project rather than maintaining a power base. The responsibilities of a foundation often includes the upkeep of project services, the timely releases of official updates, and nurturing the community surrounding the project, while not being directly attached to the project itself. The Web3 Foundation for example offers development grants, support to the Polkadot and Kusama blockchain teams, and runs free webinars and code camps. 

·   ·   ·

From the origins of the open web and early blockchains to Ethereum’s smart contracts, we have seen that the technology is maturing over time. As more attention is drawn to how many use cases exist it’s likely that decentralised technology will play an increasing part in our future. 

In the next articles we’ll be delving into the details of supply and power distribution, node numbers and token allocation, and investigating whether some of the major platforms that claim to be decentralised actually live up to this.