What is Decentralization?
One aspect of Bitcoin that gained popularity like wildfire in the crypto boom era was this idea of “decentralization”. Here is this idea of a transfer of power away from centralized authorities to a node based system where peer-to-peer transmission gains more truth from participants and audiences.
Projects like Ethereum, EOS and hundreds of other blockchain startups and dApp platforms have used the word decentralization hundreds if not thousands of times. So what’s the appeal?
Vitalik Buterin called “Decentralization” one of the words that is used in the cryptoeconomics that is is often even viewed as a blockchain’s entire raison d’être. Clearly then this is a pretty important aspect of what blockchain means when we think of how the world needs to be transformed by technology.
To live in a world of more equality, social and economic equality and less bureaucracy is very appealing for a civilization where centralized authorities whether political, feudal, religious or national have been responsible for a lot of human suffering. Now living in a capitalistic age, economic inequality and environmental irresponsibility characterize the age itself. So what perhaps could ‘decentralization’s’ role here be to the future?
Getting a bit more technical, the decentralized nature of blockchain technology means that it doesn’t rely on a central point of control. A lack of a single authority makes the system fairer and considerably more secure, according to Lisk academy. So here is the idea that decentralization is also more efficient, more secure and more ethical.
Decentralization then is not just a word that’s in vogue, it’s part of the philosophy of inclusion and the language of equality. This makes it even more appealing to younger generations and the idealism that we should live in a more fair world.
Vitalik goes on saying that thousands of hours of research, and billions of dollars of hashpower, have been spent for the sole purpose of attempting to achieve decentralization. But in 2019, can we say we are any closer to it? Does a public blockchain like Ethereum really change the world, when for all intents and purposes the most valuable tech companies such as Microsoft, Apple, Amazon, Google, Facebook and Huawei and others appear incredibly centralized.
The public blockchain(s) seem a bit like the anti-thesis of what the major “internet” companies have become, shear monopolies with an unprecedented control over information flow, data and a control of internet traffic, mobile advertising and influence on our human attention considerably being funneled into mobile, apps, streaming and video consumption.
Blockchain as a global standard is supposed to be decentralized. i.e. rather than relying on a central authority to securely transact with other users, blockchain utilizes innovative consensus protocols across a network of nodes, to validate transactions and record data in a manner that is incorruptible. The blockchain i.e. decentralization, is transparent, trustworthy and verifiable in a way that is more authentic, censorship-resistant and true.
Decentralization clearly isn’t JUST about blockchain, it is in 2019 a social movement. When a young person is investing in crypto or a blockchain startup, is it possible they aren’t just investing to make profit? Is it possible they want to contribute to something new? And, what are the ramifications of such a ‘decentralization’ movement? What are its likely partners?
When the current models of advertising, business, technology, the stock-markets and the economy are top down, what room is there for true decentralization? One paper studying the topic suggests Ethereum is more decentralized than Bitcoin? Does the peer-to-peer model improve governance in human systems in such a way that our institutions of democracy and capitalism themselves can be “upgraded”?
Without a central authority are transactions really cheaper and more secure? If a minority of individuals are said to own the majority of altcoins like Bitcoin or Ethereum, do their blockchain principles continue to be thought of as primary and the ecosystem they produce decentralized?
Clearly there is some confusion and even disinformation as to how far we can use the word ‘decentralization’ and its contexts and possibilities in the future business models. In June, 2018 the SEC declared that Ethereum and ETH, are not securities primarily on grounds that it truly is decentralized.
For the actual adoption of decentralized in business and society it’s more than likely there would be phases of hybrid collaboration between traditional structures and more decentralized ones. I think that’s what we’ll see with the future of the internet, advertising and a wide range of blockchain’s use cases. Centralized blockchains well before more decentralized ecosystem can truly flourish.
In truth the difference between distributed and decentralized systems may be less important than the social manifestation of what being a more decentralized version of capitalism and democracy might mean. In my work as a GenZ advocate of young media and internet entrepreneurs, crypto is an avenue for self-expression and a vision of a better and more ethical internet. Decentralization is therefore a means to an end, nor is it something easily achievable just by the existence of a digital asset or public blockchain. The world needs to be ready for decentralization.
We need to consider how decentralization might scale and not just public blockchains. We need to realize how movements such as those pioneered by socialist Millennials could evolve concepts such as more equality online, more radical sharing economies via universal basic income initiatives and how digital assets could marry both movements.
We can’t think in traditional terms of blockchain technical terms alone, we have to see the sociological, political and cryptoeconomic implications of what decentralization will mean, when the world is ready. Decentralization is more than just a technical term, it is a philosophy of inclusion — more powerful than the rise of crypto; more relatable than the definition of what blockchain is, it’s appealing because it’s a solution to much of what the failure of the internet in 2019.
If this topic is well received, I will expand on this.
