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Streamlining Efforts Through Centralization

Centralized solutions in the blockchain sector, disguised as decentralized, are under criticism by columnist Jon Reiter. He claims that this shift has potentially harmful systemic risks, as these centralized control points are prone to failure.

Streamlining Operations Through Centralization: The New Trend
Streamlining Operations Through Centralization: The New Trend

Streamlining Efforts Through Centralization

In the dynamic world of blockchain technology, scaling has long been a pressing issue. One of the most prominent attempts to address this challenge has been Ethereum's focus on a scaling solution called 'sharding.' However, as the industry has evolved, other projects like Arbitrum, Optimism, and StarkNet have emerged with their own novel scaling ideas.

The pursuit of scalable solutions has led the industry to implement simpler, more achievable versions of scaling, although these may not always be clearly disclosed to non-technical users. This shift in approach is a reflection of the industry's adjusted goals, as the ideal scaling solution discussed a few years ago is no longer considered feasible.

The quest for scalability is fraught with inherent technical challenges and trade-offs. Balancing decentralization, security, and performance is a delicate dance, and discussions around these topics have lessened as some have shifted focus to practical, centralized solutions like Hyperliquid. These solutions push performance limits but do not surpass fundamental hardware constraints.

Centralization also finds its way into high-performance Web3 products as a pragmatic compromise. Many projects retain security committees with ultimate authority over supposedly self-custodied assets because full trustless self-governance is difficult to implement securely. This centralization, while often obfuscated through unnecessary technical complexity, is a common theme in the industry.

The web3 economy experiences bottlenecks frequently, and the performance of a blockchain network is a crucial factor in its success. Solana claimed to have solved the scaling problem with a new consensus design, but even with these advancements, there is still no demonstrated truly 'scalable' architecture that has overcome the hard bottlenecks.

Centralized products like Hyperliquid with a closed validator set and a monopoly operator exist, pushing the limits on throughput. Centralization is increasingly appearing in unexpected places as a solution to the harder version of scaling.

Looking back, Bitcoin, which launched in 2009, could only handle approximately 7 transactions per second. Today, with the continued advancements in computer technology, computers roughly double in performance every 18 months. Yet, in 2025, a good performance for a blockchain is considered to be 7,000 transactions per second.

Despite the challenges, the pursuit of scalable solutions continues, and the industry continues to evolve. As technology advances, we can expect to see further innovations in the realm of blockchain scaling.

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