Mance is the co-founder and CEO of Hedera Hashgraph. Hedera Hashgraph is the next-generation distributed ledger technology that claims to have higher speed and security guarantees than existing blockchain solutions.
“When we talk about decentralization, I think it’s very important to be clear about what we mean. When we talk about the first layer protocol, when we talk about decentralization, what exactly are we measuring? Two different categories of decentralization are important : 1) governance and 2) transaction sequencing.
First, governance: How many different entities (people or organizations) are involved in making product roadmaps, service pricing, reward payments, and other governance-related decisions? Are these entities known by their full names, or can they be anonymous? If they can be anonymous, then it is impossible to truly determine the degree of decentralization of governance, because the same anonymous participant may be disguised as multiple different entities. Is there an opportunity to merge voting rights? For example, if voting rights are associated with governance tokens, then a single participant can increase their influence by buying or earning additional tokens, leading to an increase in the integration and centralization of rights.
The Hedera management board model is unique in the public ledger. It is composed of as many as 39 organizations with limited terms, selected to represent a wide range of industries, with member headquarters all over the world and nodes on six continents. The board members are all public, the board meeting minutes are published (and hashed on Hedera using the Hedera Consensus Service (HCS)), and each member has a vote to ensure fair, stable and truly decentralized decision-making. Even the LLC membership agreement that the company must sign to join the committee is public and hashed on HCS. This model contrasts sharply with agreements managed by a small group of core developers or a single foundation.
Next, the decentralization of transaction ordering: What is the minimum number of entities required to determine the order of transactions in the network? For example, for Bitcoin, only a few mining organizations (usually five or less) control more than 50% of the network’s hashing power, which is enough to determine the order of transactions. (At the time of writing, only three mining pools control 47% of Bitcoin’s computing power, and only two mining pools control nearly 48% of Ethereum’s computing power). Furthermore, if the network allows anonymous node operators, it is impossible to know how much any given entity controls the hashing power of the network.
The first stage of the Hedera network requires more than two-thirds of the board members to agree on the order of transactions. Currently, each board member has the same weight in voting. Because the name of each board member is public, we can say with certainty that transaction ordering is decentralized. This is already more decentralized than Bitcoin and Ethereum. In the second phase, publicly identifiable community nodes will be added, and anonymous nodes will be added to the network only after it is very certain that equity integration is unlikely.
The governance model of the Hedera network and the technical ordering of transactions are designed from the ground up to reflect the ideal of sustainable decentralization. “