The Curses of Blockchain Decentralization
This addresses the fundamental trade-off between decentralization and scalability in blockchain systems, which is crucial for developers and researchers aiming to improve blockchain performance, though it is incremental as it builds on known issues.
The paper tackles the scalability limitations of blockchain decentralization by proposing a quantitative measure and identifying key challenges, finding that true decentralization is hard due to skewed mining power and inherently limits scalability with throughput bounds and smart contract execution issues.
Decentralization, which has backed the hyper growth of many blockchains, comes at the cost of scalability. To understand this fundamental limitation, this paper proposes a quantitative measure of blockchain decentralization, and discusses its implications to various trust models and consensus algorithms. Further, we identify the major challenges in blockchain decentralization. Our key findings are that true decentralization is hard to achieve due to the skewed mining power and that a fully decentralized blockchain inherently limits scalability as it incurs a throughput upper bound and prevents scaling smart contract execution. To address these challenges, we outline three research directions to explore the trade-offs between decentralization and scalability.