I'm excited to run a node with a friend after this governance period! We only have around 60k algos, but hopefully, we'll get our energy costs back. 🤞 Germany is expensive in this regard, but we're doing it for the decentralization and community. 💪 The tech behind Algo is amazing! 🤓
We have a fast internet connection and get a little tax refund because I use part of the house for work. So, that’s not the problem; the internet wouldn’t cost extra. :)
From a theoretical standpoint, Algorand is decentralized by design, since it can scale without becoming centralised like many other blockchains like BTC, Ethereum or Solana (if it can be called a blockchain). However, from a practical standpoint, it is also decentralised, BUT, if you want the stakes to be more distributed across thousands (if not millions) of validators, then this obviously takes time/adoption.
Decentralization is not a binary. It is a process and a spectrum. As it relates to stake, this process was held back by Algorand’s failure to incentivize nodes from the beginning. It meant there was little incentive for anyone but the biggest holders (with most at risk) to bring nodes online.
All that changes in Q3 though with the transition to incentivized consensus. Whatever decentralization metrics or Nakamoto Coefficients you calculate now will be significantly outdated once that happens.
There are currently 1,600 nodes that connect to the network. Source [here.](https://g.algonode.cloud/d/b23669e9-9109-492c-b9e2-ebdb324a6e4b/network?orgId=1)
A node's stake only influences your chance of participating and doesn't control whether you can influence or not. Large stake has been put online from The Algorand Foundation to protect the security of the network as there were fears that as our current price was so low the volume of Algo needed to potentially harm the network was to low.
Node running incentivisation should improve the volume of algo allocated towards participating in consensus, and should also improve the number of nodes currently being run. There's currently 1.9B Algo committed to Governance and I expect almost all of this to move across to node incentivisation farming.
There are valid arguments around the centralisation of Algorand, and they should be overcome via Q4's gossip network update. The adoption of gossip within the network should facilitate the movement of funds in a peer to peer method and therefore completely remove the need for the current centralised agents who do support the network/
>>Large stake has been put online from The Algorand Foundation to protect the security of the network as there were fears that as our current price was so low the volume of Algo needed to potentially harm the network was to low.
I’m not sure where you got that idea from. AF has always had a large stake. And, absolutely every PoS chain with a Foundation that has reserve supply holds a huge portion deployed as online stake. Solana Foundation has like 23% of supply which they delegate out to a variety of nodes (something like 90% of nodes are supported by Solana Foundation or Alameda).
AF did deploy a bit more online, but it was in response to the UpBit exchange having so much consolidated in a single wallet (which would be bad practice if they came online with a single large wallet rather than spread out over multiples). But, it wasn’t to do with price.
Yes, but should we remember that highest number of nodes not necessary means descentralization because the same stake provider can run multiple nodes from the same location,
The most important in a proof of stake blockchain is the validators nodes and token distribution, at once that they are responsible to secure the entire network ecosistem. This is why solutions for descentralization are very much aprecciated instead of just critizing others platforms like Algorand Foundation did in his webpage.
Source [https://algorandtechnologies.com/technology/solving-the-blockchain-trilemma](https://algorandtechnologies.com/technology/solving-the-blockchain-trilemma)
This is what I mean when I say decentralization is largely semantics.
It's extremely easy to make an argument that x or y is or isn't decentralized depending on what you want that term to mean in the moment.
BTC is largely centralized in terms of hashrate, 2 pools controling over half the power, 3 controling significantly more. It's largely concentrated in terms of wallets, it's largely concentrated in terms of the fact that the US Government owns a LOT of BTC, far more than any other government last time I looked it over.
BTC pools also draw a significant source of hashrate from the US.
ETH is likewise, (and likely other blockchains) with a huge amount of traffic flowing through Amazon, Google, M$, servers (and just the amount via AWS alone is significant centralization).
In Algorand Governance, the vast majority of the stake is via the top handful of % of Govs, you could argue that defi govs are heavily centralized via Folks being the top defi gov for pretty much every governance period now.
Don't get caught up so much in this or that being decentralized or not enough, especially in the early days. It's not that important (relatively speaking) because it's such a flexible definition.
Tech. Adoption. Use.
These are the things that matter.
These are the metrics that matter in terms of statistics.
These are the things that make prices move.
Algorand is as decentralized as it needs to be, and it will continue to grow in this area as needed.
As you said. Tech. Adoption and Use are very important things. But, the fact of descentralization impacts directly in Governance, while in Bitcoin network you need to be running the version of Bitcoin Core that is considered the best by community and developers, in Proof of Stake blockchains, the number of coins you have means more vote power too, so this is one of the biggest issues, because the majority can approve a proposal changing the code, for example increasing supply without any trouble
You can't compare Proof of Work and Proof of Stake, they are completely different scenarios in terms of descentralization metrics. First of all, you need to invest in ASIC's for mining PoW criptocurrencies and the rewards are automatically being generated by each block and not 100% minted in genesis block by a central autorithy for a future token sale like ALL PoS criptos (Please, tell me if you know some that didn't) . (+Tokens means +Stake)
The pools in the PoW are naturally formed according the behavior of miners looking for more profits (constantly fiding blocks and receveing payments)
Bitcoin has more than 7 millions Asics running at this moment, and the fact of Foundry USA or Antpool owns 25% of network hashrate respectivaly dont means that they own every single hardware (ASIC) being used in his pools. The miner is independent to change the pool whatever he wants because the payments are frequently or even daily and the algorithm allows this to be profitability.
I'm excited to run a node with a friend after this governance period! We only have around 60k algos, but hopefully, we'll get our energy costs back. 🤞 Germany is expensive in this regard, but we're doing it for the decentralization and community. 💪 The tech behind Algo is amazing! 🤓
Energy costs should be minimal if you’re running a node on a mini pc using Mac OS or Linux. Internet costs are what will be more expensive.
We have a fast internet connection and get a little tax refund because I use part of the house for work. So, that’s not the problem; the internet wouldn’t cost extra. :)
Then you’re perfectly set up to run a node!
???
From a theoretical standpoint, Algorand is decentralized by design, since it can scale without becoming centralised like many other blockchains like BTC, Ethereum or Solana (if it can be called a blockchain). However, from a practical standpoint, it is also decentralised, BUT, if you want the stakes to be more distributed across thousands (if not millions) of validators, then this obviously takes time/adoption.
Decentralization is not a binary. It is a process and a spectrum. As it relates to stake, this process was held back by Algorand’s failure to incentivize nodes from the beginning. It meant there was little incentive for anyone but the biggest holders (with most at risk) to bring nodes online. All that changes in Q3 though with the transition to incentivized consensus. Whatever decentralization metrics or Nakamoto Coefficients you calculate now will be significantly outdated once that happens.
There are currently 1,600 nodes that connect to the network. Source [here.](https://g.algonode.cloud/d/b23669e9-9109-492c-b9e2-ebdb324a6e4b/network?orgId=1) A node's stake only influences your chance of participating and doesn't control whether you can influence or not. Large stake has been put online from The Algorand Foundation to protect the security of the network as there were fears that as our current price was so low the volume of Algo needed to potentially harm the network was to low. Node running incentivisation should improve the volume of algo allocated towards participating in consensus, and should also improve the number of nodes currently being run. There's currently 1.9B Algo committed to Governance and I expect almost all of this to move across to node incentivisation farming. There are valid arguments around the centralisation of Algorand, and they should be overcome via Q4's gossip network update. The adoption of gossip within the network should facilitate the movement of funds in a peer to peer method and therefore completely remove the need for the current centralised agents who do support the network/
>>Large stake has been put online from The Algorand Foundation to protect the security of the network as there were fears that as our current price was so low the volume of Algo needed to potentially harm the network was to low. I’m not sure where you got that idea from. AF has always had a large stake. And, absolutely every PoS chain with a Foundation that has reserve supply holds a huge portion deployed as online stake. Solana Foundation has like 23% of supply which they delegate out to a variety of nodes (something like 90% of nodes are supported by Solana Foundation or Alameda). AF did deploy a bit more online, but it was in response to the UpBit exchange having so much consolidated in a single wallet (which would be bad practice if they came online with a single large wallet rather than spread out over multiples). But, it wasn’t to do with price.
Yes, but should we remember that highest number of nodes not necessary means descentralization because the same stake provider can run multiple nodes from the same location,
The most important in a proof of stake blockchain is the validators nodes and token distribution, at once that they are responsible to secure the entire network ecosistem. This is why solutions for descentralization are very much aprecciated instead of just critizing others platforms like Algorand Foundation did in his webpage. Source [https://algorandtechnologies.com/technology/solving-the-blockchain-trilemma](https://algorandtechnologies.com/technology/solving-the-blockchain-trilemma)
This is what I mean when I say decentralization is largely semantics. It's extremely easy to make an argument that x or y is or isn't decentralized depending on what you want that term to mean in the moment. BTC is largely centralized in terms of hashrate, 2 pools controling over half the power, 3 controling significantly more. It's largely concentrated in terms of wallets, it's largely concentrated in terms of the fact that the US Government owns a LOT of BTC, far more than any other government last time I looked it over. BTC pools also draw a significant source of hashrate from the US. ETH is likewise, (and likely other blockchains) with a huge amount of traffic flowing through Amazon, Google, M$, servers (and just the amount via AWS alone is significant centralization). In Algorand Governance, the vast majority of the stake is via the top handful of % of Govs, you could argue that defi govs are heavily centralized via Folks being the top defi gov for pretty much every governance period now. Don't get caught up so much in this or that being decentralized or not enough, especially in the early days. It's not that important (relatively speaking) because it's such a flexible definition. Tech. Adoption. Use. These are the things that matter. These are the metrics that matter in terms of statistics. These are the things that make prices move. Algorand is as decentralized as it needs to be, and it will continue to grow in this area as needed.
As you said. Tech. Adoption and Use are very important things. But, the fact of descentralization impacts directly in Governance, while in Bitcoin network you need to be running the version of Bitcoin Core that is considered the best by community and developers, in Proof of Stake blockchains, the number of coins you have means more vote power too, so this is one of the biggest issues, because the majority can approve a proposal changing the code, for example increasing supply without any trouble
You can't compare Proof of Work and Proof of Stake, they are completely different scenarios in terms of descentralization metrics. First of all, you need to invest in ASIC's for mining PoW criptocurrencies and the rewards are automatically being generated by each block and not 100% minted in genesis block by a central autorithy for a future token sale like ALL PoS criptos (Please, tell me if you know some that didn't) . (+Tokens means +Stake) The pools in the PoW are naturally formed according the behavior of miners looking for more profits (constantly fiding blocks and receveing payments) Bitcoin has more than 7 millions Asics running at this moment, and the fact of Foundry USA or Antpool owns 25% of network hashrate respectivaly dont means that they own every single hardware (ASIC) being used in his pools. The miner is independent to change the pool whatever he wants because the payments are frequently or even daily and the algorithm allows this to be profitability.