So I am trying to figure out how we construct a crypto coin so that there remains a tension or competition between decentralization and centralization ongoing. We don't want entirely decentralization and no centralization as that is just as bad as entirely centralization, e.g. see the
reply I made to ArticMine upthread and how 100% decentralized control over what goes in the block chain means a choice between unbounded spam or oligarchy control. Thus the problem is the lack of balance and Bitcoin flip flops either to too much decentralization forcing too much centralization (a Tragedy of the Commons). Credit CoinCube for making me aware of the applicable math on that point.
You must use PoW or PoS and thus the problems of centralization and government control are the end result of all of what we are doing here. And helping to force a world government cooperation of regulating the internet, encryption, and Bitcoin mining. Bitcoin is a Trojan Horse that weakens the nation-states and traditional banks, which must fight back by cooperating with a world governance regulation of the internet and Bitcoin mining.
The problem TBTB is that it appears to me you have set yourself a goal that is impossible to achieve. You are trying to create a cryptocurrency that does not centralize over time and I think this is impossible. I do not claim to be an expert on cryptocurrency but the challenge you seek to solve appears to me to be the same as the dynamic we discussed extensively over in the
Economic Devastation thread.
Essentially the give and take between consensus and decentralization appears strikingly similar to the social balance between collectivism and anarchism. Complete decentralization appears doomed to fail for the same reason complete anarchism fails it simply does not converge. The goal with cryptocurrency is thus identical to the goal of an evolving social contract, progression to higher energy states and overall increased degrees of freedom.
The evolution of the social contract appears to be a progressive climb to higher potential energy systems with increased degrees of freedom. The state of nature begat tribalism. Tribalism grew into despotism. Despotism advanced into monarchy. Monarchies were replaced by republics. I suspect that in the future republics will be consumed by world government, world government will evolve into decentralized government, and decentralized government will finally mature into a shared consensus among individuals with limited or no government.
Each iteration has a common theme for each advance increases the number of individuals able to engage in cooperative activity while lowering the number of individuals able to defect. To borrow from the links in the opening post each iteration increases the amount of entropy the system can sustainably support.
You are of course correct when you state that bitcoin weakens the nation-states and traditional banks, which must fight back by cooperating with a world governance regulation of the internet and Bitcoin mining. This is obviously going to happen. However, the more important question is whether the subsequent system that results is one of higher potential energy and overall higher degrees of freedom.
When warlords first emerged in ancient times and united area previously under the control of feuding tribes was that progress? I would argue that it was for it led to top down imposed order over large area that was previously ruled by competing and often warring tribes. This opened up the possibility to safely travel and trade over large areas as well as increasing the population of humans able to economically interact. It was certainly not all good but it was a net good.
Similarly with cryptocurrency the goal is not to create a currency that is immune to centralization but to create a currency that is resistant to centralization. All viable cryptocurrency models will probably centralize so the winning model will be the one that maximizes the degrees of freedom in an economy and minimizes government control despite this centralization.