{"id":5646,"date":"2019-02-08T11:00:31","date_gmt":"2019-02-08T05:30:31","guid":{"rendered":"https:\/\/gtm360.com\/blog\/?p=5646"},"modified":"2022-02-24T16:23:34","modified_gmt":"2022-02-24T10:53:34","slug":"blockchain-calling-bs-on-decentralization-resilience","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2019\/02\/08\/blockchain-calling-bs-on-decentralization-resilience\/","title":{"rendered":"Blockchain \u2013 Calling BS On Decentralization & Resilience"},"content":{"rendered":"

Since I wrote\u00a0Flight Delay Insurance \u2013 Why Blockchain?<\/a><\/strong>, I’ve come across several updates that have reinforced my skeptical views around the claim of decentralization and raised new doubts about the touted advantage of resilience.<\/p>\n

UPDATE #1: SINGLE POINT OF FAILURE<\/strong><\/p>\n

Let me take the following remark in my original post<\/a><\/strong>:<\/p>\n

Data is distributed across multiple nodes, so there’s no single point of failure (apart from the hosting provider of the dApp website, that is<\/strong>). As a result, a dApp is intrinsically shielded from data breaches and inherently enjoys fault tolerance.<\/p><\/blockquote>\n

As you can see, the highlighted portion is mentioned in the passing. In hindsight, I should’ve been more circumspect about it. Blockchain apps are having an increasingly critical dependence on the hosting provider.<\/p>\n

Let’s take Ethereum-based dApps for example.<\/p>\n

The Block<\/em> reports in\u00a0The Burden of Infura<\/strong><\/a>\u00a0that the “Ethereum blockchain continues to swell in size, with a full archive node requiring 1.8TB space”.<\/p>\n

\"\"<\/a><\/p>\n

That’s a lot of storage space at the node level.<\/p>\n

Likewise, the bandwidth requirement of a node has also doubled in six months.<\/p>\n

The combination of high storage and bandwidth requirements has escalated the cost of running a node to $1200 per month.<\/p>\n

Apparently the prohibitively high cost\u00a0has pushed many dApp developers to\u00a0opt-out of maintaining their own node, and move to hosting provider Infura<\/em><\/strong>. Since Infura is a centralized infrastructure owned by blockchain consultancy ConsenSys, it has now now become a choke point.<\/p>\n

Since a significant portion of the Ethereum network is based on Infura, most ETH dApps are becoming centralized and subject to a single point of failure.<\/p>\n

UPDATE #2: TRUST THE ORACLE<\/strong><\/p>\n

Re. the following line in my\u00a0original post<\/strong><\/a>:<\/p>\n

I may not need to trust AXA after fizzy … but I still do need to trust its Flight Data Provider<\/strong> (whoever it is).<\/p><\/blockquote>\n

Mine is no longer the only voice in the wilderness expressing concern about the pedigree of the external data provider. The Blockchain industry recognizes “oracle problem” – jargon for this challenge – as a major hurdle to the mainstream adoption of smart contracts.<\/p>\n

The following passage from MIT Technology Review<\/strong><\/em><\/a> drives home this challenge:<\/p>\n

\n

…before smart contracts can do anything really useful, they need a reliable way to connect with events in the real world\u2014and that has proved impossible so far. This is the so-called “oracle problem,” …<\/p>\n

\u201cOracles\u201d are real-time data feeds that deliver things like weather data, currency exchange rates, airline flight information<\/strong>, and sports statistics to smart contracts.<\/p>\n

The idea is that by working together, the two systems can allow blockchain-based services to interact with real-world events with a greater degree of trust than is possible from today\u2019s oracle services. For example, if your flight is canceled but you bought flight insurance, a smart contract might instantaneously pay you after getting an update from a trusted source of flight times.<\/strong><\/p>\n

So what\u2019s the problem? The oracle services introduced to date defeat the purpose of using a blockchain in the first place… (because) today\u2019s oracle services are too centralized<\/strong>… . They represent single points of failure that make targets for tampering.<\/p>\n<\/div>\n

Ergo, a dApp that relies on an oracle for its basic functioning is not all that decentralized.<\/p>\n

\n

#Ethereum<\/a> is completely centralized. Infura will undoubtedly follow the fork, which forces "the majority of dapps" onto a different monetary policy than they initially signed up for. Does Infura give its customers a choice?<\/p>\n

— grubl\u00e9s (@notgrubles) January 14, 2019<\/a><\/p><\/blockquote>\n