Freedom and Decentralization

[2 min] To provide the greatest liberty, power must be separated.

Montesquieu wrote his famous book, The Spirit of the Laws, in 1748. He argued that a government must have certain features to provide its citizens the liberty in its most extensive way. The indispensable factor, which made Montesquieu a requisite part of the 101 Political Science textbooks is the separation of power, the executive, legislative, and judicial.

Why do we need to divide the power?

If one person or persons control all the power, then there is no constraint for that power to act arbitrarily. Arbitrary power reduces or takes away liberty entirely. What makes the use of power non-arbitrary secures the freedom of those subject to that power. For this reason, separation of powers is the most crucial aspect for securing the liberty of citizens against any government.

What are the powers that blockchain technology decentralizes?

The nodes confirm transactions and create new blocks in a blockchain, such as the Bitcoin blockchain. The power being used in a blockchain is then validating transactions and creating new blocks in the blockchain. If a single or few (read person or persons) nodes perform this power, then there are no restraints against the arbitrary use of that power. The Bitcoin blockchain then disseminates this power to many nodes so that one or few nodes cannot reduce or take away the liberty of individuals. In this case, liberty is a positive concept because it uses the blockchain protocol to validate transactions.

PoW vs. PoS

This reasoning practice helps us compare different consensus protocols of blockchains: the proof of work (PoW) and the proof of stake (PoS). The more the nodes perform such an exercise, the more secure the protocol is against the arbitrary use of power. This is the fundamental reason why Bitcoin blockchain is more secure because it uses the proof of work consensus mechanism. The number of nodes is so many and dispersed that coordinated action is challenging to perform.