Challenging Kyle Samanis blog post about Solana

Hey I posted this on /r/solana as well but wanted to hear the opinion of the eth communtiy as well.

Today I found a blog post about Sol vs Eth from Kyle Samani who is a big crypto VC investor.

https://multicoin.capital/2021/05/25/technical-scalability-creates-social-scalability/

One of the central points he makes is that decentralization is overrated. As long as there are enough nodes such that the network is sufficiently censorship resistant, it's enough. Many people criticize solana because it is not decentralized enough, but in reality decentralization does not matter that much. He further states that it is natural to trust the network even though you cannot run your own node.

I want to challenge that claim.

I bought some SOL because I was amazed by the performance of the network and since I am IT experienced I wanted to run my own validator. However, in that attempt, it became clear to me that you need to run a validator node like a business. Besides the self-stake, you need heavy hardware and a gigabit connection. OK fair, however renting a server with these hardware specs that need to be upgraded every year is uneconomic, so you basically need to buy the parts and put the server in a rented facility to account for emergency power supply and other external failures. Most rented facilities bill you heavily for power and connection so in order to be profitable you need a large starting capital.

At this point it became clear to me that running a solana node equals running a business with ~$15k starting capital and this is not a bad thing per se! However it weakens the trust model more than Kyle Samani describes in his article.

Here I am leaning a little bit out of the window: Decentralization matters more than just censorship resistance. Decentralization means that the network is not controlled by one group of people. If in the future only companies have the resources to run a node, the network is run by a company. Occasions might occur that missalign the incentives of the users with those of the node providers. But the companies running the nodes have the power to decide. As far as I know, better node performance leads to bigger staking yield which is meant to incentivise competition among the nodes but ultimately leads to more centralization because successfull node providers will gain the capital to spin up more nodes at different locations.

Decentralization is not just distributed computing but distribution over all ethnicities, cultures and income groups. Please discuss 🙂