Decentralization. We’ve got it wrong from the beginning
Not Bitcoin’s fault though; the fault is completely our own. We treat decentralization in a centralized way, as we always do, and have done to everything and everyone, since the dawn of our civilization. This realization has far-flung implications in understanding not just Bitcoin as alien technology but also the fundamental flaws of the way we run our world and a possible path to a much improved world and future. I promise that we’ll get to the bottom of all of it, but right now let’s focus on Bitcoin and cryptocurrency.
Our world up until now is still a centralized one. Bitcoin is designed as a decentralized peer-to-peer digital cash (per Satoshi). When we tried to integrate Bitcoin (or cryptocurrency) into any existing system, be it a business or a social endeavor, we hope that would make such system decentralized. Have we really achieved that? Apparently not. That’s what we talked about earlier; bolting one piece of alien technology to a system of our own doesn’t make our new system suddenly becoming a shining piece of alien technology. Far from it. We can even say that most efforts in building decentralized applications with cryptocurrency are nothing but carrying out cargo cult rituals.
The proliferation of cargo cult development in the cryptocurrency sector is reciprocal to the unrealized enlightenment that we must treat Bitcoin and cryptocurrency as `alien technology`; that we can’t just drop cryptocurrency (or blockchain) into a system and call it a decentralized application (or system/business).
A real world system is always multifaceted and can be characterized as a multidimensional object; and depending on the environment it operates in, those dimensions are irreducible. Even when you carefully design and optimize for just one or several dimensions, extra and unwanted dimensions will always creep in. Pretending they don’t exist will only compromise your design. This phenomenon manifests very predominantly in real world cryptocurrency (sometimes just called blockchain) systems. The main discord here is that up until now, for most people the only known decentralized dimension is the cryptocurrency (blockchain) dimension. And no matter how much you simplify and clean up your design, once you interact with the real world it becomes dirty — other unwanted dimensions creep in, as indicated earlier. Since those unwanted dimensions most likely will be centralized dimensions — boom! Your supposedly decentralized design with a built-in shiny cryptocurrency component collapses back to a very ordinary centralized system. Then what’s the point? You might just as well have designed it as an ordinary centralized system in the first place and be done with it.
A good example is the cryptocurrency exchange — e.g., Mt. Gox and its succession of cronies.
A user of a cryptocurrency exchange (crypto exchange in short) must realize that using such a service is completely different than using a cryptocurrency like Bitcoin directly. The crypto exchange and cryptocurrency are completely different creatures. Many features of a cryptocurrency such as Bitcoin: decentralized peer to peer network, censorship resistance, trustless consensus — do not exist anymore in a crypto exchange. Crypto exchanges are very centralized systems and possess the `counter-features` of the Bitcoin-like cryptocurrency features that we’ve come to cherish:
Decentralization — most crypto exchanges are more centralized than traditional security exchanges;
Censorship resistance — even if not KYC/AML certified most crypto exchanges have full control over who can be allowed to join their network;
Trustless consensus — crypto exchanges, like any other centralized system, are totally trust-based as well as access-controlled — you have to be accepted into their database in order to use their service and you have no privacy. Without privacy, you have neither ownership nor control, at all.
In other words, the features that made Bitcoin and cryptocurrency desirable in the first place, are all gone in crypto exchanges; existing crypto exchange implementations are antithetical to the design of cryptocurrency. Many people are greatly misled and mistaken in this situation. They think their crypto assets are safe; they are not. They think they own their cryptocurrency in a crypto exchange; they don’t. Trustless consensus? No way. Crypto exchanges are the most egregiously gatekeeping systems out there. The thing is, at least traditional security exchanges are protected by decades of regulated role-separation requirements and practices. People trust those centralized but heavily regulated institutions. And crypto exchanges are just monolithic monstrosities where operators have frequently defrauded their users with impunity.
So you see, Bitcoin and cryptocurrency themselves are decentralized and good, but once they come in contact with the real world (our current one) and are used in the real world, they become compromised by it. it is nearly impossible for Bitcoin or cryptocurrency to retain decentralization when carrying all that inescapably centralized dimensionality from our real world , such as a crypto exchange. Other cryptocurrency systems do not fare any better either. Our centralized world will eat the decentralized cryptocurrency dimension. As said before Bitcoin and decentralized cryptocurrencies are really not compatible with our world.
Hope is not all lost. If our current centralized world doesn’t play well with Bitcoin and cryptocurrency, why not build a new one? A decentralized world?
But before we can take on the quest for a decentralized world, we have to evolve our way of thinking, because this piece of alien technology is nothing like we have seen before, to not fall into the cargo cult trap again, let’s bend our minds a little more.
Many want Bitcoin to be our savior. It became a symbol of resistance against financial disenfranchisement, inequality and oppression. 2.5 billion unbanked people could use the help of Bitcoin today, just look at the situation in Venezuela, the first place where Bitcoin became essential for ordinary people’s day-to-day survival¹, instead of just another exotic way for ordering designer coffee and beer in a posh district of Singapore. This is happening right now, 10 years after Bitcoin’s creation or appearance in our world, which gives us a big hint: where do you think is the best place for Bitcoin to become essential instead of just a nerd luxury, a lifestyle accessory?
It was said that the best wine came from grape vines that grew in the harshest places on earth (as least the legend goes) — so do we. In order to brew the best distillate we must venture outside of our comfort zone (for many of us that means the cryptocurrency / blockchain technology sector), engage ourselves in great debates of the current time that at first glance do not seem directly relevant to Bitcoin or cryptocurrency, which is: how to ensure our survival in the face of global climate change, the rising inequality in all aspects of life?
Bitcoin for World Peace?
No, I am not under the influence of some fine distillate to propose this “crazy” idea, but still, isn’t that too far-reaching?
What about our world’s social-economic establishments? Aren’t they supposed to lead the charge against the woes of humanity? Well, we can all feel the conspicuous unwillingness and inability of a ruling world order that has become so mired in political deadlocks (please google Brexit if you have lived under a rock for the last couple of years) that all but ensured nothing gets done; much to the delight of the beneficiaries of this status quo (I shall not name names — if you are a human being you know who they are).
That is just MAD (Mutually Assured Deadlock).
We can’t help but feel powerless (when do we ever have power in the first place?). Maybe that’s why many of us seek the sanctuary of Bitcoin and cryptocurrency; our little posh place, to escape the outside world that is boiling. Then some of us wake up and realize that we have an alien technology in hand: Bitcoin. When survival is called into question, and you just happen to have a piece of alien “weaponry” at hand, wouldn’t you want to right all the wrongs of the world with it?
Maybe that’s the rationale behind the ICO of the Jesus Coin?
Don’t just laugh yet! Have you heard of the Petro Coin from Venezuela? Yes, that Venezuela we mentioned earlier where Bitcoin grew out of just being a lifestyle accessory to a way of survival. Ironically, Petro Coin is the first cryptocurrency launched by a sovereign government. We must say kudos to those Venezuelans, they are just in so much love with cryptos! (Not so fast ladilla! And wipe that smirk off thy face!) But really, when survival is calling — that just made their love of Bitcoin so much more true and real and potent.
So don’t get on your high horse just yet. If you think that the Venezuelans aren’t ready for Pax Cryptonica², none of us are. Therefore, let’s pause a bit and re-examine this piece of alien technology that we have. So what’s so special about Bitcoin?
To say that Bitcoin is a piece of alien technology means that we should be prepared that common sense might be shattered, and the world we are trying hard to fit Bitcoin into is not the right one for Bitcoin to work well or even function in. It means that we might have to rethink much of our existential and fundamental worldview. This phenomenon has been explored in many sci-fi works; for example, in the movie “District 9” humans couldn’t operate alien weaponry until the main character “grew” alien limbs after being exposed to alien biotech. Yet our realization that Bitcoin is Alien Technology must sink even deeper into our collective psyche as a civilization; calling into question our very basic understanding of “common sense” in our use of technology and culture that we take for granted for thousands of years.
Maybe we shouldn’t treat Bitcoin as some weapon — even a revolutionary one at that — because thinking in terms of weapon means you want to fight someone or something. By that it also implies that you want to keep the status quo, even if you don’t realize it, since all fights and wars ended up preserving the very system one is fighting within or against; an exemplary manifestation of dualism. If you want to change something, don’t fight it; try growing out of it for a change, like your adult self changed from your adolescent self by outgrowing it. So a better way of using Bitcoin (and cryptocurrency) as an alien technology is not treating it like a weapon to right the wrongs of our world, but rather use it to build a larger (much larger in fact) and better world from the ground up, that contains our comparably much smaller world; thus the wrongs of our world won’t matter anymore.