Defining Decentralisation in Permissionless Blockchain Systems

Abstract

The term decentralised as a description of the architecture, operation, and governance of permissionless blockchain systems has become ubiquitous. However, in these contexts, the term decentralised has no clear definition. Blockchain ecosystems are complex, and thus it is essential to address confusion among stakeholders about their nature and promote understanding of the intentions and consequences of their implementation. This article offers a theoretical definition of the term decentralised in the context of permissionless blockchain systems. It is proposed that five inextricable and interconnected aspects are required, at a minimum, to warrant a claim that a permissionless blockchain system is decentralised. These aspects are disintermediation, a peer-to-peer network, a distributed blockchain data structure, algorithmic trust, and open-source principles. The relationship between the five aspects is discussed, and it is argued that decentralisation is not binary but exists on a spectrum. Any variation in one or more aspects may impact the system’s decentralised nature as a whole. The researchers identify areas where further investigation in this field is required and propose instances where the knowledge garnered may be used.

Permissionless Blockchain Systems as Pseudo-Random Number Generators for Decentralized Consensus

“…Layers in a blockchain system A permissionless blockchain system's environment comprises three layers: external, primary, and secondary (Figure 2) [8].…”

“…VRFgenerate () → Key public , Key secret (8) The RSA cryptosystem here is the RSA-FDH-VRF-SHA256 above, but there are also other constructions for VRFs, for example, from elliptic curve cryptosystems [95].…”

“…The authors in [7] describe the process as a community of participants that accept a set of digital governance rules or govern the blockchain system. These rules, also called consensus algorithms, provide a source of algorithmic trust [8] between participants and must be transparent if parties are to agree on the correctness of the blockchain [9]. This requirement for transparency further necessitates that blockchain systems operate on open-source principles [10].…”

“…For more information, see https://creativecommons.org/licenses/by-nc-nd/4.0/ FIGURE 1. The aspects of decentralisation in permissionless blockchain systems [8].…”

“…Decentralisation in permissionless blockchain systems revolves around algorithmic trust that allow disintermediated parties to maintain a distributed blockchain over a peer-topeer network in an open-source environment [8].…”