Why Decentralization Matters In An Increasingly Entrepreneurial World
We live in a world where overpowered tech corporations have essentially conquered the open internet and left the rest of us scrambling to get a piece of the proverbial pie.
Let me explain.
For its first couple of decades, the World Wide Web was a space for any developer with a good idea to thrive. By establishing a community and providing a useful product, people could build their projects and protocols without relying on a higher authority to boss them around.
This is one of the first modern attempts at decentralization, where there is no central service for these ventures. We merely had the internet and whoever wanted to craft their own space on it.
Now, however, those same companies that started on the early internet are writing their own rules for success.
Do you want to launch a mobile app on your own website? Good luck competing against the 3,805,000 apps on the Google Play Store.
Looking to create the next big web series? Try getting it out there without publishing to YouTube, which hosts an upload rate of 400 hours of video every minute.
As it stands today, it is nearly impossible for internet ventures to stand on their own against big tech. Especially when paired with the sharing capabilities of Facebook, Twitter, and other social networks, companies like Google have all the control.
Instead of trying to beat them, I propose that we join them.
Centralization vs. Decentralization
By being online first, Apple, Google, and other big tech parties have gobbled up all of the online space and created an environment where consumers rely on their online services.
Think about it. How many apps, programs, and websites are only accessible with an Apple, Google, or Facebook login?
Too many to count.
While it isn’t all bad, the centralization of applications and internet properties stands in the way of real innovation.
For example, if you want to get your app seen, it isn’t going to happen unless you adhere to Apple’s App Store rules and algorithms. This means entrepreneurs are shunning some of their vision to ensure profits and success on the platform.
What’s worse, if you break their rules, your app is taken off the store and all your work results in zero profit.
But what happens when those rules suddenly change?
We can take notes from the YouTube demonetization issues that have emerged over the past couple of years. On this video platform, creators make money based on ad revenue with YouTube (owned by Google) taking a cut.
When YouTubers don’t follow the guidelines of the platform, however, they can lose control of their content and their brand.
For example, YouTuber PewDiePie made a video with some racist themes and advertisers didn’t want to associate with these themes, so they pulled out of his videos. Another YouTuber, Logan Paul, recorded the moment that he discovered a dead body in Japan and, though it’s absolutely repulsive what he did, YouTube had the power to pull his channel and his primary source of income.
Though these people were the sole creators of their content, YouTube ultimately determined the success of their content based on their own guidelines.
This development caused a domino effect that changed the platform forever. Many full-time creators in all different countries lost a significant amount of income as advertisers became much more selective over where their ads were shown.
Then, YouTube’s algorithm adjusted to cater to this change of mindset.
Before this, video makers could craft their content as they see fit, assuming it didn’t cross any unreasonable boundaries. Now, the YouTube algorithm automatically demonetizes videos in ways we still don’t understand. Creators can appeal bad claims and get their videos remonetized, but this takes time, and they miss out on the most important window for revenue: the first few days.
Thousands of people were affected by this change, all because they rely on this one platform for career success.
It’s hard to blame YouTube for this situation directly, though. The social network needs to appeal to advertisers to stay afloat, but this also showcases how complicated centralization can be.
That’s not to say centralization is all bad, however. In a lot of ways, a centralized platform is similar to a publisher. These spaces offer excellent tools for exposure and creators can upload their content for cheap or even free.
Even so, the current setup creates an over-reliance on centralization, which, of course, is exactly what companies like Google and Apple want.
Because of their power, bigger organisations prevent smaller companies from even existing.
The most notable example of this can be found with VidMe. The short-lived company tried to offer an alternative to YouTube but shut down after only a couple of years of launching.
The company tried for a direct approach to supporting content creators, but didn’t have ads. Instead, users could support their creators with tips or by paying a monthly fee. A lack of advertisers meant no need for censorship but also very little income for the VidMe team.
In a lot of ways, VidMe provided benefits we would see on decentralized platforms, but it existed in a centralized space. VidMe couldn’t get to a stable level of economic growth in a way that could compete with YouTube and was ultimately down.
This inability to monetize content doesn’t only affect the content creators, though. Money is also needed to run servers, pay for upkeep, expand to other countries, and more. In the end, there weren’t enough funds to support the platform.
The same undertaking running on a decentralized network, however, wouldn’t need as many funds. Creators wouldn’t have a third-party that takes a part of their earnings. A creator-centric approach would be much more at home in a decentralized space.
Though it isn’t a perfect solution, a healthy amount of decentralized platforms would help content creators, artists, and other online entrepreneurs establish their own venture without fear of some central government or authority telling them how to run it.
Decentralization offers a trustless, open platform with no one party in control. The space would see creators managing, voting and discussing decisions before executing.
A decentralized platform can’t go down, it can’t be censored, and nobody can take control of it.
Benefits of Decentralization
It’s easy to spout about big organisations and government parties taking over and how they aren’t good for anybody, but that isn’t the complete story. There are indeed many benefits to centralization, but it’s crucial to discuss decentralization and why it needs to be an option.
As blockchain technologies move forward, we’ll start to see more decentralized platforms and applications (also known as dApps) become available. I’m going to break down some of those benefits and show you what we can look forward to.
No Central Governance
This is perhaps the most obvious benefit, but it is still the most important.
By building on a decentralized network, users and creators come first. There isn’t a third-party company or government that takes some cut of the funds, nor is there anyone to suddenly change the rules and tell creators what can and cannot be done.
In a decentralized world, there’s no such thing as overpowering government officials ruining something like net neutrality.
A network without a central national government is one that is governed by a community. Rules and changes are voted on. No one, power-hungry party can come in and change what they’d like. A decentralized space to share ideas is a safe area for creators.
It’s important to note here that an entirely decentralized network is not necessarily the ultimate goal. If the system has no strict governance, it will take much longer to implement features and ideas because everything must go through a discussion and voting process.
Finding a balance between a flow of ideas and efficiency is imperative for decentralized platforms. It’s a tough balance to make, but crucial to get right.
Instant Fund Delivery
As you may know, most if not all future decentralized platforms will run on the blockchain and pair with some sort of cryptocurrency. In doing so, these spaces will take advantage of smart contracts.
Smart contracts are automatic if-then statements. A creator can set up smart contracts so that when it reaches a certain payment threshold, the contract will automatically release the funds. There is no paying a third party any cut and no waiting for money to process.
From an economic standpoint, smart contracts make online careers much more viable. Due to the global application of decentralization, we may even seen more internet participation from developing countries as well.
A Focus On Privacy
Anyone who signs up for a website must give up data like their name, e-mail, address, and sometimes even payment information. However, centralized services are vulnerable to hackers, bad actors, and all forms of identity theft. Should someone break into the local service providers, all of your data is at a loss with little you can do.
Decentralized systems have no one central point of failure.
Instead, they exist based on all of the different devices connected to the network, hence the “decentralized” moniker. For a hacker to take over a decentralized system, they would have to take over a significant amount of connected devices before making any public impact.
Because of this, private information is much more secure on a decentralized network.
A Global Approach
While the internet is globally accessible, there are still segments divided by country. Decentralized networks, however, are global.
In every sense, a decentralized approach is really a development on a worldwide level. These networks aren’t tied down by any laws. We could even compare a decentralized platform to be like the Wild West. At this level, anything can go.
Only here, the Wild West isn’t a hostile place. Rather, it’s a place where anyone has a chance to succeed with any idea. Every territory has its own advantages and disadvantages. With decentralization, a service from one place can be shared across the world with developing countries to improve their way of life.
With decentralization, entrepreneurs, small or large companies, and anyone from the public space have a way to share their ideas with the rest of the world.
Technology isn’t always available in developing countries either. However, should the national government of a developing territory establish a decentralized network, anyone from city dwellers to citizens in a rural community could gain access to it.
While decentralization isn’t perfect, it’s a step up from local networks in significant ways. They provide an opportunity for community-first platforms to take a stand against the big corporations of today. We still have a long way to go, but should decentralization succeed, creators can continue their work knowing they have a safe space to exist on the internet.