Posted by Stan Larimer & Daniel Larimer on .Bitcoin is all about decentralizing the control over money through objective consensus on ownership. What often gets lost in the discussion is the difference between decentralization, scalability, and fault tolerance. Bitcoin is an example of a decentralized system whose scalability is limited by the power of an individual node rather than the combined power of all nodes. This means that a system’s ability to become distributed for fault tolerance, decentralized for control, and scalable for performance are not linked together by the number of nodes. In fact we could say that attempts to combine these roles via the same mechanism will carry with it the combined limitations rather than the combined benefits. Hence economies of scale and free market competition will tend to minimize unnecessary fault tolerance (redundancy) while centralizing for performance. If we are not careful this will result in centralization of control.When the BitShares developers get a little uppity, I love to remind them that what they are doing is not exactly rocket science.But, while trying to find a way to communicate the architecture of BitShares to folks on other forums, I’ve stumbled on the following description, drawing on my past experience with continuously reconfiguring fault-tolerant flight control systems. (Yes I wrote a technical report with that title back before there was an Internet or even a word processor.) See if you buy this way of describing the BitShares architecture: Continue reading →