Elly Zhang is a London-based global marketing specialist who leads growth initiatives in Asia for the startup of Bitcoin and Ether Blockchain portfolio.

The following article is an exclusive contribution to the CoinDesk 2017 edition.

This year has been crucial for digital assets like bitcoin and ether, resulting in unprecedented price increases, capital investments and general awareness.

But despite these successes, one of the fundamental properties of all cryptocurrencies – their decentralized nature – was attacked in 2017.

With this in mind, it is worth remembering that a fundamental value proposition of blockchains is that there is no central intermediary or organization that the controls. Instead, these protocols are used to allow the network to reach a consensus on the validity of transactions and data.

Bitcoin was the first digital payment system to operate without a central repository, and the concept (quite new in 2009) is now widely accepted and is becoming more and more ubiquitous. But the world 's first blockchain has evolved since its humble beginnings, and today there are variations on the original – including, bitcoin money and bitcoin gold.

The forks have become so prevalent that one could call the model an initial fork offering (IFO).

Not only bitcoin gold and bitcoin cash, but more bitcoin variants initiated by Chinese companies such as "super bitcoin", "bitcoin diamond" and "bitcoin god" are on the way.

And while everyone can find a market, it's worth asking the question: Do these networks hold the promise of technology? And should consumers worry about it?

Framing the question

It can be argued that the three cryptocurrency networks are all different in how they encapsulate the vision of bitcoin as a decentralized network.

But it should also be noted that decentralization is often carried out by the market economy.

Thinking of this, I remember the classic question asked by Soviet leader Mikhail Gorbachev in 1988:

"I have not seen a single line of bread, please bring me to meet the bread supply manager in London, I have to learn his secret."

In fact, there was no one to provide bread to the city of London, which is why there were no queues.

Although bitcoin was the first so-called "decentralized" product based on blockchain technology, there are arguments within the community as to whether it constitutes a true "decentralization".

Some argue that the power and influence of the mining industry make the network more centralized than most people expected. To support this point of view, it is helpful to review Satoshi Nakamoto's e-mail regarding the original bitcoin design.

He writes:

"Long before the network reaches such a large size, it would be prudent for users to use simplified payment verification (section 8) to verify double spending, which requires only the string of block headers, or about 12 KB per day: only people who are trying to create new parts should use network nodes: at the beginning, most users would use network nodes, but as the network grows, with specialized hardware farms A server farm would only need one node on the network and the rest of the LAN connects to that node . Bandwidth may not be as prohibitive as you think. A typical transaction would be about 400 bytes (ECC is very compact). Each transaction must be served twice, say 1KB per transaction. Visa processed 37 billion transactions during fiscal 2008, an average of 100 million transactions per day. That many transactions take up 100 GB of bandwidth, or the size of 12 DVDs or 2 HD quality movies, or about $ 18 in bandwidth at current prices. If the network got so big, it would take several years, and by then, sending 2 HD movies over the Internet probably would not seem like a big deal. "

This e-mail clearly indicates that Satoshi Nakamoto predicted that the execution of network nodes would be the responsibility of some mining pools or "specialists" rather than just users.

What is less clear, that is what he would have done with the results of his plan.

The bitcoin money problem

Up to now, it seems that Satoshi's initial scale-up proposal actually increases the mining pools to decide the future of the network.

We saw an example of this first-hand when China's developers and miners tried to find a new solution to perceived network congestion – by creating bitcoins.

Bitcoin Cash is essentially an active blockchain created using a software implementation called Bitcoin ABC. The software has ruled out a somewhat controversial code change called SegWit and has a block size of 8 MB, up 1 MB on bitcoin. The new rules created a new network.

Now there are still ongoing disagreements between the community as to whether bitcoin money constitutes a hard bitcoin fork or should be considered a separate "altcoin", but we'll keep it for another time.

The fact that 70% of bitcoin mining power belongs to Chinese miners is relevant to this conversation, and the fact is that these entities can easily join forces. Bitcoin Cash, I believe, is a perfect example.

With the support of BTC.com, BTC.Top, ViaBTC, AntPool (which all have direct or doubtful links with Bitmain), it can be said that bitcoin money has become a centralized commercial product controlled by the Chinese minors.

Weak links in gold bitcoin

With the increasing price of bitcoin money as a backdrop, others followed the pattern.

Another fork of bitcoin took place this fall, the bitcoin gold, which sought to integrate the technology used by other cryptocurrenices to block the factors that led to more centralized mining.

Less known about gold bitcoin, but according to his website:

"Bitcoin Gold decentralizes mining by adopting a PoW algorithm, Equihash, that can not run faster with specialized equipment used for bitcoin extraction (ASIC Miners). "

Efforts are already underway to create an FPGA chip for zcash, and with progress here, it may only be a matter of time before developing an ASIC chip. If this is the case, the extraction could again move users away towards traditional mining pools.

To this possibility, we might ask ourselves, what was the starting point of the fork?

One possible reason: Since initial coin offerings (OICs) are banned by the Chinese government, China-based encryption companies have an appetite for developing new business models.

Open questions

By 2018, I believe it's important to answer key questions about this trend.

These include whether bitcoin forks may be weaker by providing consumers with decentralization, whether buyers want to access these properties, or whether "decentralization" is simply a buzzword and a marketing ploy for all cryptocurrencies.

In the end, time will tell if bitcoin, bitcoin money or gold bitcoin become the most prevalent, but the big thing about an open market is that users can decide which has the best quality / price ratio.

If behind-the-scenes groups can not offer more value than competitors, then their assets will struggle to survive.

That said, I do not expect to see a complete consensus on these cryptographic assets. As prices continue to rise, I suspect more external powers, be they governmental, institutional or within the bitcoin community, to try to exert their influence and power. .

When the time comes, we will be grateful that we have taken the time to understand how to fulfill Satoshi's vision as he would have liked, if not exactly as he expected it to be.

Disagree? CoinDesk is seeking submissions for its 2017 in Review series. Send an e-mail to news@coindesk.com to present your idea and make your point of view heard.

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