The process of blockchain mining and validation entails adding new transactions to an already existing ledger of transactions. Proof of Stake (PoS) blockchains require ownership of a specific cryptocurrency and results in a governance model where "one dollar equals one vote".
The general rule in a blockchain system is, the more participation the better it is for decentralization, as measured by Nakamoto coefficient and Herfindahl score. Each chain has their levels of decentralization, some more than others.
Not all network participants choose to run their own node due to upkeep cost and complexity in running a client. Hence, these services are centralized to professional infrastructure providers. When validators join together in a pool, the profit generated by mining is divided based on how much staking power each validator contributes. As more people join these pools, they quickly grow in size. Limited computation and monetary resources make monopolies likely within these networks as they create plutocracies and redistribute power among the major players. In other words, can blockchain governance be captured by cartels?
Validating the validators
Any public blockchain consists of subsystems. It is possible to undermine a decentralised system if one of its critical decentralised subsystems is undermined as well. It’s a security concern when miners or validators collude. In Poof-of-Work (PoW) systems, with 51% the majority of miners can change the ledger. In PoS systems, with 34% the validators can stop almost all PoS ledgers, bringing the whole blockchain to a standstill.
The internet, even blockchain systems have a long-standing problem that has yet to be solved. When a malicious user floods a server or network with requests and traffic, it results in a Distributed Denial of Service (DDoS). A distributed denial-of-service attack (DDoS) can cause a blockchain to become overloaded with incoming data, causing the blockchain to go down in order to continue processing. There have been instances where transaction spamming attack have disrupted operations of these networks.
When a network lacks any third-party intermediaries to verify identities, anyone with enough resources can attack and take control of the network. Permissioned blockchains help eliminate this concern, whereby only approved accounts can be validators. Proof-of-authority (PoA) is an alternative consensus mechanism, which relies on known and reputable validators to produce blocks, and thus, provide computational power to a network. It enables relatively faster transactions using a Byzantine Fault Tolerance (BFT) algorithm with identity as a stake. There are different criterias to be a validator according to each blockchain. For example some require validators to be a United States Notary with a valid license, whereas others only require that you’re a real human.
The "unique human problem," or the challenge of ensuring that each unique person can only create one account within a given domain, was best summarised by Vitalik Buterin in the context of identity. As a result, anti-Sybil identities aren't meant to collect any personal information about their users other than the fact that they aren't using fake accounts to defraud the protocol. When proof-of-personhood focuses on the pursuit of "uniqueness" (also known as Sybil-resistance), it changes the way people think about authentication in general. The only question it asks is "is this the only account you control?" instead of "who are you?"
The role of Humanode
With Humanode, blockchains can include liveness detection checks in the consensus mechanism to be a validator of the network. To maintain the integrity of decentralization and fairness, validators would have to prove he or she is indeed the owner of the node. With anti-spoofing technology from our liveness detection partners, we have the assurance that only one human has control over one node, the validator rewards will also be distributed fairly for a more equitable and democratic system. With the rise of L1 chains, one of the differentiators is the level of security which comes from decentralizing the nodes which are provably operable by humans. Human-only networks of validators, as opposed to the default of extraction and individualism, make room for cooperative and collective modes of economic functioning.