Decentralization and Centralization : Similarities and Differences — Part 1
The world around Blockchain technology and Digital Economy is flooded with thoughts about decentralization. How much have we understood the tenets of decentralization. How much is it different from centralization. What are the drivers of decentralization. This article is an attempt to deep dive into the first principles of decentralization from an economic point of view.
Decentralization is a strategic retreat from centralization of systems, processes, methods and modes. It could also be the emergence of alternate centers in an integrated economy. When centralization can be represented by mathematical models like aggregation, summation, integration and so many other operators, we could visualize decentralization as a multi dimensional vector or a quasi polynomial or a group or a game.
Decentralization and Centralization cannot exist in an isolated or stand alone mode. There should be a collection of economic modes supporting the trajectory of centralization and decentralization. While centralization becomes a convergent behavior in each iteration of a process, decentralization becomes more and more divergent as space time advances. Centralization could be measured in terms of density, decentralization could be measured through various measures of momentum. Entropy could be a common measure running across centralization and decentralization.
Decentralization could be measured differently from different contours. Extent of decentralization will look entirely divergent when measured from various vantage points. When the binding force in a centralized system weakens, it begins to exhibit tendencies for decentralization. Decentralization has begun in our global economy due to the architectural issues with globalization in the last decade. Decentralization can also be seen as a defense mechanism from fragmented economies to resist the hegemony and interpellation from the centralized forces in the economy.
TO BE CONTINUED …