Proof-of-Stake and Stablecoins: A Blockchain Centralization Dilemma

Alden's writing on crypto is incredibly deep thorough. Here she takes on, at a foundational level, the tradeoffs of decentralization and how various solutions fall on that spectrum. This is not a Boolean, but instead is a sliding scale that can be optimized to a solution.

Here’s another way to phrase the question. Since we know that there are use-cases for fully centralized databases (e.g. Twitter or Amazon Web Services), as well as use-cases for fully decentralized databases (e.g. the Bitcoin network), are there use-cases for a partially-centralized and partially-decentralized database?

If the answer is yes, then that’s basically the steel man argument for the existence of base-layer smart contract blockchains like Ethereum, Solana, Avalanche, Algorand, and more.

This set of hypothetical partially-decentralized databases wouldn’t conceptually compete with Bitcoin as truly decentralized immutable asset, but could they coexist alongside Bitcoin indefinitely as a semi-open operating system for apps that benefit from partial auditability or partially-decentralized control?

I think that her nod toward a future where we have multiple solutions that have differing levels of centralization and protection is most likely. Based on the problem that you are solving, and the protocol needs, you should develop on a platform that provides you the tradeoffs that make sense. This has been true for everything we build in tech for as long as we've been building.