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Federated Blockchain Systems: A better trade-off between sustainability and decentralization?
[working paper]
Corporate Editor
Weizenbaum Institute for the Networked Society - The German Internet Institute
Abstract Blockchain-based systems are enjoying unbroken popularity. Different economic and social actors are investigating their application for fostering decentralization and separation of power. Whether a blockchain-based system can live up to such goals is heavily determined by the choice of a consensus p... view more
Blockchain-based systems are enjoying unbroken popularity. Different economic and social actors are investigating their application for fostering decentralization and separation of power. Whether a blockchain-based system can live up to such goals is heavily determined by the choice of a consensus protocol - the rules by which participants agree on what gets added to the blockchain. Bitcoin’s consensus protocol is inherently decentralization-enabling, at a notoriously high ecological cost. So-called permissioned protocols, while incomparably more efficient, are dismissed as being closed-off and "centralized". Federated blockchain systems represent a middle ground between these two extremes and promise to offer openness and security without sacrificing ecological sustainability. As a rough approximation, their approach can be described as bootstrapping consensus from a web of trust. In this overview article, after a short review of the Bitcoin approach and possible alternatives to it, we introduce the ideas behind federated blockchain systems and discuss their impact on future blockchain systems.... view less
Classification
Technology Assessment
Free Keywords
Blockchain; Bitcoin
Document language
English
Publication Year
2022
City
Berlin
Page/Pages
12 p.
Series
Weizenbaum Series, 26
ISSN
2748-5587
Status
Primary Publication; reviewed
Licence
Creative Commons - Attribution 4.0
FundingThis work has been funded by the Federal Ministry of Education and Research of Germany (BMBF) (grant no.: 16DII121, 16DII122, 16DII123, 16DII124, 16DII125, 16DII126, 16DII127, 16DII128 - "Deutsches Internet-Institut").