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The “D” Parameter

Cardano Network Parameters Part 1

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As of this publication, Cardano has around 30 network parameters. These parameters are the mechanisms that control how the Cardano Blockchain works. Today, we are talking about one of the oldest parameters, the Decentralization parameter - also known as the “D” parameter. While the ‘D’ parameter has now been retired, it’s an interesting part of the origin story of Cardano.

So what was it for?

Every blockchain starts with a few people turning on the network. Then, slowly, others around the world can join that network. The job of the Computers on a blockchain network is to process messages and make sure everyone is playing by the rules. These computers govern the network.

Public permissionless blockchains like Cardano allow anyone - anywhere in the world - to run a copy of the blockchain software, and link their computer to the global Cardano network. The more computers there are connected and making changes to the network, the more decentralized the network is said to be.

When Cardano first opened its doors for anyone to join the network, it actually limited who could participate in making changes - also known as producing blocks. Anyone could join the network – but at first, only the founders and preselected computers participated in block production.

So, how did it move from this controlled and centralized system to a fully decentralized network? This is where the “D” parameter comes in. Every five days since the July 2020 launch of the Shelley era, the ratio of insiders vs everyone else was reduced by 2% - shifting away from insiders producing blocks, moving out to stake pool operators all over the world.

On March 31, 2021 - less than one year later - the ‘d’ parameter was set to 0. This meant that block production was no longer censored - at all. Now, anyone, anywhere in the world, can add their computer to the Cardano network and participate in block production.

This is interesting for two reasons:

The first is this: every blockchain network that exists starts with just a few computers. To grow from a single company server into a permissionless, public blockchain with the promise of an uncensorable data store that guarantees strong ownership and worldwide accessibility was a huge feat. One that required widespread community buy-in and global participation. For Cardano to achieve this goal in less than a year was exciting and impressive.

The second interesting thing about the ‘d’ parameter is that a parameter can actually change. That means that the founders of Cardano could have changed it – from a public permissionless network BACK to a permissioned network – where only pre-approved servers could manage the state of the network.

Fortunately for the Cardano community, the ‘d’ parameter was removed entirely with the September 2022, Vasil upgrade event.

Knowing about the origin of your favorite blockchain can help you understand its foundation and values, and maybe predict how it is likely to grow and change in the future.

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EP1: 'd' Parameter