Decentralization: Expectations vs Reality

The movement to decentralize the web accompanied by the emergence of blockchain and cryptocurrency networks brought along lots of promises and expectations. At Epicenter, we have been exploring this space since 2014 through in-depth conversations with some of the leading minds driving this trend — one white paper at a time. The time has come to take a step back and look at the big picture. Are efforts to decentralize the Web paying off, which aspects of decentralization are the most crucial as we move towards a mature Web 3.0, and on which goals can we all agree as we work towards improving the status quo?

Watch the first edition of Epicenter Insights on YouTube.

To answer these questions and more, Epicenter recently hosted its very first live event: Epicenter Insights. We were joined for a broad conversation with the leading minds of the decentralized ecosystem from the Berlin community: Eleftherios Diakomichalis, co-founder of oscoin, Liz Steninger, the CEO of Least Authority, Florian Glatz, the blockchain.laywer, and Ravi Kurani, investor at Earlybird Venture Capital. The panel was moderated by Brian Fabian Crain, host and co-founder of Epicenter.

While our panelists agreed that moving towards a more decentralized Web is desirable in the face of a growing concerns over the sovereignty of personal data, each of them named different areas and aspects of decentralized solutions that they are most excited and hopeful about. Propositions ranged from decentralized storage and infrastructure, decentralized ownership and the movement towards community-owned networks, the emergence of privacy-centric technologies, the reboot and redesign of the current legal systems, or even the potential for finding the holy grail of income redistribution and reduction of inequality.

That being said, there appeared to be consensus that there is nothing inevitable about blockchain and decentralization efforts. “The technology we are building is not neutral, and is pushing us towards certain outcomes. Everything that we do matters and will be amplified by the attention given to the space. We need to make sure that our intentions are being seen through in how we represent ourselves, and how we communicate”, emphasised Liz. According to Eleftherios, a positive trait of our industry is the ostensibly principled-oriented approach many decentralized projects adopt as they attempt to create conditions which favor more equalized and fair power dynamics. For instance, while raising capital to bootstrap the project, oscoin founders communicated to the their investors that 51% of the network must be owned by the open source community. And while the institutional investors funding decentralization projects have very high and specific expectations of what needs to happen in the space, he hopes that the influx of capital won’t lead to imbalanced expectations. “We should not compare the user experience on the decentralized web to the user experience on Google, because the infrastructure is not there yet”, explained Ele. The greatest potential brought by the blockchain and decentralization ecosystem lies in our ability to leverage these platforms for permissionless experimentation and should be viewed as an evolutionary process.

While the ‘blockchain revolution’ is quickly winning hearts and minds of software engineers, we must be aware of the consequences of leaving all visionary decisions to a small group of people. Even though many of them are undoubtedly brilliant and competent in the fields of computer science, economics, and law, the systems and protocols they are designing — with “perfectly aligned incentives” and “algorithmically adjusting token issuance models” — may be unrealistic, and their visions of a brave new world built on blockchain may not address the problems facing the majority of population.

Florian illustrated his concerns with an example of Brasilia, a city designed from scratch by the legendary genius architect Oscar Niemeyer as an utopian ideal — which yet turned out an almost unliveable urban planning failure. “Its an interdisciplinary endeavor to build a functional social and economic protocol, and I don’t think we actually even have a clue to what it implies,” he added. In spite of these concerns, one aspect of the blockchain technology that Florian sees as particularly valuable is its ability to reveal the true nature of things, getting people to start questioning the fundamentals and shift their perspectives on money, governance, community, nation states — and other aspects of the pre-existing system.

Given that our efforts to further decentralize the Web with blockchain-based applications are still in the early phases, what can we do ensure that its overall impact will be positive? According to our panelists, education and UX design are they key focus areas which require attention in order to empower more people to participate. As with the traditional lean startup approach, there’s a value in focusing, starting with small incremental upgrades to the existing processes, and solving real problems. According to Ravi Kurani, the key is to design systems that are flexible enough that we can learn and effectively implement all the learnings that we gather along the way. “Decentralization is a spectrum, and we will figure things out along the way. We’ll be able to build decentralized networks that are responsible, yet still decentralized,” added Ravi. We should also adjust our expectations. As pointed out by Liz, “anytime there is a significant industrial change it does not disrupt every aspect of people’s lives. We won’t change everything in the world. But we can improve some things.”

We’d like to thank our sponsors ShapeShift and Earlybird Venture Capital for making the first edition of Epicenter Insights possible, as well as The Family in Berlin for providing the event space. Do you have any suggestions for what other broad topics should we discuss in the future editions of Epicenter Insights? Feel free to ping us on Twitter or let us know via our community channel on Gitter.