The Philosophy of Decentralization: Towards Data Independence


David (Dudu) Azaraf
The Capital Platform
5 min readJan 13, 2019

The beautiful side of crypto: Part 2

When Satoshi Nakamoto unveiled his blockchain creation to the world, it was the birth of not just a new technology but a new movement. Blockchain, together with smart contract technology, gives billions of people autonomy in shaping their financial systems and digital universes. The internet, which began as a movement to democratize information, has come under the control of Big Tech and their data oligopoly. Many frustrated digital consumers, particularly the younger generations, have been captivated by the promise of a decentralized internet giving power back to the people. As the potential of blockchain gained traction, so did the quest to build scalable applications that would allow users to own their data with their cryptographically-secured private key. Yet for the philosophy of decentralization to gain a universal following, technical barriers to mass adoption must be removed for decentralized applications to flourish and reach millions of users.

P2P cash: The Birth of Decentralization
The tail-end of 2008 ushered in an era of steep financial decline across the world. Stocks had fallen 40% in the previous 18 months, mortgages were in default and industry titans such as Lehmann Brothers and Bear Sterns had disintegrated in dramatic fashion. Confidence in the institutions and agencies tasked with guaranteeing financial stability and consumer protections had plunged to new lows. It was against this backdrop of disillusionment with the existing financial structure that Satoshi Nakomoto released his Bitcoin whitepaper, a paradigm-shifting philosophy that would aim to strip these centralized entities of their power monopolies. Satoshi and his Bitcoin blockchain had solved the ‘double spend’ problem allowing money to be sent like an email, with a network of peers responsible for ensuring the veracity of each transaction, a role traditionally reserved for commercial banks. Thus began the march towards decentralization as the way to reimagine and reconstruct the pervasive & entrenched modern day hierarchies governing our lives.

The Internet is Broken
What Bitcoin did for money, smart contract technology set out to do for the internet. Tim Berners-Lee, who devised the hypertext system in 1989, initially conceived of his creation as a digital ‘commons’, an equitable technology that would connect disparate strands of information across global networks. Yet his dream currently lies in tatters.

“We demonstrated that the Web had failed instead of served humanity, as it was supposed to have done, and failed in many places,” he told Vanity Fair in a recent interview.

Instead of a free-flowing information superhighway, the internet has become a cartel controlled by a tiny number of supernodes such as Facebook and Google. These tech giants monopolize our data and attention, often displaying gross negligence in securing our information and privacy.

A network of free-flowing bits of data traversing the globe has proven to be an aspirational myth. In reality, Big Tech monopolizes data control, to the consumer’s detriment.

If Data is the New Oil, Big Tech is the New OPEC

Over the last decade, the fourth industrial revolution has replaced oil, the black gold, with data as the most valuable & influential resource in our global economy. If data is the new oil, then user attention is the rigs where the most critical digital resource is extracted. The BPs and Chevrons of the virtual universe implement sophisticated behavioral techniques to keep their users glued to their screens, generating a constant flow of data that they then use to build targeting algorithms with laser-focused precision. Facebook, Google, & Amazon have sole control over their platform’s privacy policies and determine who can access their massive pools of user data.

If data is the new oil, then Big Tech is the new OPEC. Much like the natural economy depends to a large extent on a handful of oil-producing nations, the internet economy is inextricably linked to the decisions of a few tech firms in Silicon Valley. However, these tech giants don’t always have their incentives aligned with the interest of their users. The ease with which Russian troll farms have managed to weaponize these centralized platforms in order to sow division and spread misinformation across Western democracies should serve as a clear indictment of their data protection practices.

Smart Contract Technology to the Rescue
A smart contract is a piece of code that automates the functionality of a traditional contract by self-executing when the terms set out by the parties have been met. Whereas Bitcoin enabled a distributed network to agree on the updated balance of each node, smart contract technology extended this novel concept of distributed consensus to cover computations done by each node as well. Developers could now create various smart contracts, each with its own business logic, and connect them to a user-friendly interface making a whole new universe of applications possible. Users of these decentralized applications have direct ownership of their private data by means of their private key, choosing who to share it with and under which conditions. Content creators can monetize their fans and engagements directly without needing to cut in a rent-seeking middleman. The terms and policies governing these platforms are determined by community consensus, bringing decentralized applications closer to the internet Berner-Lee had envisioned.

As blockchain communities around the world continue celebrations to mark the 10 year anniversary of Satoshi’s whitepaper, it inspires a look back to the grandiose visions of this cypherpunk-inspired movement. Decentralization, the pursuit of reorganizing our power structures — both online and offline — along more equitable lines, sits at the heart of every blockchain network’s value system. What started off as a movement to rid banks of their immense power has evolved into an impassioned revolution to decentralize the internet and give the average user more control of their digital destiny. Data independence should be as important for the privacy-conscious digital consumer as oil independence is to the national security agenda of many sovereign nations.

Thanks to Alon S for the opening graphic

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David (Dudu) Azaraf
The Capital Platform

Crypto chassid musing on Torah, technology and the intersection that lies between. Ancient wisdom📜 for a futuristic generation 🤖.