SPARTA Protection Against Centralization
Any network user can support SPARTA operations and receive new coins as a reward if their balance exceeds 1,000,000 SPA. Besides, all users have equal chances of generating a new block, regardless of the value of their balance. This ensures protection against centralization. Let’s review this issue in more detail using examples.
Cryptocurrencies using the PoW technology
The PoW technology used by many cryptocurrencies, including Bitcoin, does not rule out centralization. Miners with more powerful equipment have more chances of generating blocks. The more powerful the equipment is, the more often a miner can generate blocks. Whenever a few miners unite their hashrates into the so-called mining pool, their profit and influence experience a boost.
For instance, at this point the Bitcoin network is facing a situation when a few big mining pools could form a single pool and easily conspire to arrange a 51% attack on the network as their cumulative hashrate would exceed a half of the total network hashrate. This is a sign of centralization when the human factor could affect behavior of cryptocurrency on the market.
Therefore, a small group of big players could dictate its conditions to all the other players. There’s nothing left but hoping for their decency. A mere possibility of this situation endangers the key Bitcoin principle initially formulated by the creator of the network, Satoshi Nakamoto — the principle of decentralization.
Cryptocurrencies using the PoS technology
Almost all cryptocurrencies using the PoS technology offer an advantage to the nodes with a bigger balance when generating blocks. Assume a node has a balance of 2,000 coins while another node has a balance of 3,000 — the node with 3,000 coins on the balance will have a chance to generate a block more often. What if it’s 100,000 coins? In this case nodes with a balance of 2,000 will almost never generate blocks while the node with 100,000 will generate block very often.
Therefore, nodes with a bigger balance could come to dominate the market one day which is an obvious sign of centralization. What if they form pools? Wanting to gain an advantage, malicious users might deliberately accumulate a big balance for their nodes, unite with others and concentrate most coins in their hands, thus having a huge influence on the cryptocurrency market.
All nodes are equal in the SPARTA network!
Although SPARTA also uses the PoS technology, its algorithm is designed to even the odds of generating blocks for all nodes with a balance of at least 1,000,000 SPA. Even if a node has a balance of 200,000,000 SPA, it will generate blocks just as often as a node with a balance of 1,000,000 SPA.
This rule protects the SPARTA network against centralization — no one can artificially influence the distribution of coins and dominate the market. These conditions are truly fair and honest for all users that can become the foundation for the new financial relations between people. Join SPARTA and build these relations with us!
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