Vitalik Buterin - The Advantages of Decentralization

Vitalik Buterin - The Advantages of Decentralization - EventHorizon 2017

So what is decentralization, anyway? (6:08)

Architectural decentralization - is it one physical system or many physical systems?
Political decentralization - is it controlled by one person or entity or many?
Logical decentralization - is the interface or data structure a singleton, or an amorphous swarm?

Why decentralize? (11:07)

Fault tolerance - use redundancy to reduce risk of a system failing accidentally
Attack resistance - cost of attack sublinear, so splitting a system into components makes attacks more costly
Collusion resistance - making it more difficult for a sub-group of community to act in its own benefit at everyone else's expense
Efficiency (sometimes) - decentralization may be more efficient due to diseconomies of scale or spare capacity considerations

What might we decentralize? (25:05)

Production of energy
Distribution (ie. making and maintaining ires)
Source authentication (eg. is the power green? Is it financing any nasty dictators?)
Market mechanisms (ie. allocation and incentivization)

Blockchains seem most well-suited for markets, though we can also think about source authentication.

How can decentralization help? (27:10)

Fainess
- Proving a market/auction algorithm is fair: 60 years of game theory
- Proving that the fair algorithm was the one that was actually executed: what a blockchain can do
Privacy preservation
- No central point of data collection
- Reduced incentive to create a point of data collection
- Blockchians transparent by default but privacy can be added via crypto, eg. ZKPs
Privacy isn't just about big brother paranoia, it's a critical requirement for fame-theoretic incentive compatibility of many classes of mechanisms!