Is decentralization now real?

Decentralization is a popular technology trend at the moment. It is linked to edge computing, blockchain, and Web3. This is happening at a time when many services are centralized and, in fact, are becoming still even more centralized when they are moved to clouds. The “centralized vs. decentralized” debate is not new — it is something that has been discussed for decades. However, even if we can compare decentralization processes to a pendulum, things seldom return to the old models.

The early days of the web

In the early days of computers, there were only a few mainframe computers. A company may have had only one mainframe from such vendors as IBM, Digital Equipment Corporation (DEC), or Hewlett-Packard. Employees who needed access to this computer had dummy terminals that were text-only displays and keyboard inputs. Everything revolved around this mainframe computer: data, intelligence, and processing power.

Later, in the 1980s, we started getting personal computers and home computers, like Commodore 64, Apple II, and MSX standard computers. IBM introduced PCs in 1981 and brought to the market Microsoft’s PC-DOS for IBM. We can say that this was the beginning of the decentralization of computing and data storage. PCs came to the office and changed the whole market and computer landscape. Mainframe vendor giants like DEC that could not adapt to the PC-driven market disappeared.

Centralized vs. decentralized web debate

The Netscape Navigator browser was launched in 1994. While it was an important milestone for the development of web services, Tim Berners-Lee had already proposed the world wide web a few years earlier at CERN, and they were the first ones to create the first implementations of the web. One could claim that the world wide web created a more decentralized structure for data storage and processing. Still, we can also argue that the web contributed to making the structure more centralized — many services were run as web services (as opposed to local programs on a PC). This is also a great example illustrating that the notions of “centralization” versus “decentralization” and related trends are not so straightforward.

Anyway, web services have led to more centralized services. Some internet giants have started to dominate markets and cloud services have got most companies to run many of their services in their clouds and store their data there. Enterprises use a lot of SaaS products. It’s ironic that we now have more and more powerful personal computers and laptops, yet we use them almost like dummy terminals in the 1970s, where most of the intelligence of services, data, and processing occurs in the cloud.

The emergence of app markets

Apple created the real mobile app market when it introduced the first iPhone in 2007. Compared to many web services, mobile apps are more decentralized, as they have native software that runs in the terminals, i.e., in phones. But of course, they typically also interact a lot with cloud-based services.

I was working with software and network services in the 1990s; and I remember that I was able to participate in building Ericsson’s strategy when I worked for one of their customers and partners. One central theme and discussion in the strategy work was to create scenarios looking at how much intelligence, data, and processing will occur in networks and servers versus in terminals. The objective was to evaluate whether future services would be centralized or decentralized.

An additional dimension for the discussion is whether a service is decentralized or distributed. This has been a hot topic since at least 2016 and 2017, when blockchain really started to emerge. True blockchain believers wanted to emphasize that any real blockchain solution must be distributed, not simply decentralized. Now it looks like decentralization is the dominating term.

Repetitive patterns of decentralization

I wanted to offer this historical summary to illustrate that decentralization is not a new idea, and it is not always so clear what is really decentralized or centralized. These patterns should be kept in mind as we are observing current trends towards greater decentralization. We’ve also learned that it is totally feasible to decentralize services; a centralized model — e.g., SaaS and cloud computing — is not the only one that works.

There are many reasons why we are moving again towards more decentralized services. Here are some of them:

1. Blockchain-type models enable new business models;
2. Users need better control over their data and applications, as well as better value from their personal data;
3. AI and IoT enable more personal and local services where latency, security, and availability are critical;
4. Technology developments such as more local processing power and federated learning empower decentralization;
5. People, regulators, and politicians have become more skeptical of centralized solutions offered by a few internet giants.

Although decentralization is now a trend, many “old school” IT people are skeptical of this trend towards decentralization. Moreover, these skeptics of decentralization are trying to offer various reasons why decentralization will not be feasible. However, if we look at the history of technology development and the evolution of user needs, it would be naïve to think that in the future, we will somehow remain stuck with centralized solutions and thus arrive at the end of development. The only constant is change.

This raises the question about the modalities of decentralization we could achieve. As we have learned from the pages of history, many new developments tend to have decentralization and centralization components. For example, user-held data models will likely be based in personal clouds — i.e., each user will have their own cloud instants (rather than keeping data in a centralized terminal or server). The details of how edge computing will develop are still unclear.

Typically, sustainable new solutions are based on real customer needs and use cases, not only on technology standards. Decentralization must follow that example.

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