Decentralizationism: Crypto’s Emerging Religion
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Tuesday night, Vladislav Ginzburg and I were recording the latest edition of Sunset Crypto. Because we didn’t have a guest on for the first time in a few episodes, we had time for bottomless crypto hot takes.
One of the things that’s been on my mind for a while now is that decentralization is starting to seem less like a principle and more like a religion. Centralization vs. decentralization is the most fascinating debate that crypto has provoked, period. The whole reason Bitcoin exists is because its creators rejected reliance on centralized financial entities like banks, governments, and regulators. If Bitcoin plays out the way proponents believe it will, everyone will have the choice of whether or not they want to trust central actors with their financial destinies and many will decide not to.
While many cryptocurrencies have followed Bitcoin’s lead and are specifically geared towards replacing money, other crypto projects seek to disrupt and target societal reliance on non-financial companies, like Amazon Web Services, Ticketmaster, Con Edison, and Facebook. After all, if people should be free of a company’s power to control your finances, shouldn’t they also be free of one’s power to control the public cloud, the secondary ticketing market, the energy market, and your social identity and data? At a minimum, it seems like a fair choice to present to users. Ultimately, the businesses that we entrust our resources and data to are in the same position as central financial authorities, just with a different industry focus.
And here’s where we cross a line:
That’s an actual exchange of three consecutive tweets from last month between yours truly and Chris DeRose. As someone who works in the public cloud space, I was excited to chime in and ask about Chris’s perspective. In my business, morality is not called into question very often, especially that of a company like Amazon Web Services. AWS essentially invented the public cloud market and gave the world a new and transformative way of hosting IT resources. On a daily basis, I speak with companies looking to migrate their resources to the public cloud so that they can achieve a specific business goal that they can’t reach with traditional on-premises hosted services.We’re not talking about good and evil here, are we?
Chris’s response threw me for a loop. He clarified in his next message that his tweet-from-the-pulpit was an observation rather than endorsement of decentralization as a higher being, which eased my concern that some new form of fundamentalist was about to condemn my centralized body to a decentralized inferno. Since then, the only evidence I’ve seen on either side supports Chris’s observation that there are those who worship at decentralization’s altar and simply won’t compromise or narrow those views.
Most religions, in their early days, are practiced either with fundamentalist zeal or not at all. While extremists exist in virtually every faith known to humankind, time tends to water down the absoluteness with which followers adhere to religious principles. The passage of time and the discoveries that come over thousands of years have made our world more scientific and less dependent on mysticism and religion to explain things that happen around us. I say this because we are clearly in the early days of Decentralizationism as a belief system and the zealots are out in force. We’re still years away from this point, but it’s not crazy to think that there will come a confrontation between centralized entities of all kinds and the followers of Decentralizationism. Before you argue that it’s already happening, note the fact that Facebook’s stock price has fallen from an all-time high of around $190 to the upper $150s as a result of the Cambridge Analytica scandal. A drop that small wouldn’t even register as a blip in the crypto world. People are nowhere close to revolting completely against centralized entities, even when they give them reason to.
Not to get too far down the road with this whole straw man argument I’ve got going here, but that confrontation on the decentralization side will be frightening for many if it’s led by the zealots. Furthermore, I don’t even know what role moderates can really hope to play. If you’ve been living under a rock since 2016, you may have missed that nuanced centrists don’t really capture the imagination and passion of the masses anymore. In early 2018, when everyone and their mother was closing down their crypto holdings and either licking their wounds or counting their fiat profits, the hardened purists resolutely doubled down. Certainly, new crypto converts were won (you’re reading one’s blog post right now), but the strongest, most confident voices remaining were people who had been through countless rises and falls before and felt the pull of a higher power. Google searches for Bitcoin and the like have declined steadily since peaking in December, indicating that the average person whose mind had yet to be enmeshed with the pillars of Decentralizationism was taking their outside perspective and going home.
Crypto Twitter is littered with people who want to take decentralization well beyond financial disruption. After last month’s school shooting at Stoneman Douglas in Parkland, FL, a lot of top crypto people posted stuff like this:
He’s right that private security is not new. What I suspect will sound new to many is linking a principle of cryptocurrency to human safety. I’m not seeking out a gun control debate with pro-gun folks in this space and I very much respect Jameson Lopp for his Bitcoin work and ideas. I am, however, extremely curious to know how Decentralizationists feel about things like fire departments, waste management and sanitation services, hospitals, or schools. None of those centralized services are perfect in their current form, by the way — far from it. That being said, if we decentralized firefighting, for example, how long would it be before a group of people emerged as particularly proficient fire extinguishers? How long after that would the “firefighting community” form? How long after that would someone suggest that the damage to people, the environment, and property, incurred by fires was so severe and so difficult to reverse that we should keep the firefighting community on call all the time, ready to put out any blaze? See where I’m going with this?
Here’s the point — there is such a thing as going too far with decentralization and I hope it never truly reaches the point of Decentralizationism as the status quo. If it ever did, we’d be solving problems that we didn’t actually have and creating new ones that could set civilization back, all in the name of ideological purity masked as “consistent thought”.
So, how do we lock in on decentralization and all its beneficial power without bleeding too far into Decentralizationism?
From what I can see, the focus needs to remain on slaying crypto’s original dragon — money, and the halls of powers that control it — until the centralized bodies in that space are truly disrupted and people are living better from that disruption than they were before it. Alex Mashinsky and Celsius Network keep the focus on this point really well, because the crypto space doesn’t yet have a “killer app” that has made a dent towards accomplishing the original goal. I’m certainly not calling for a gag order on all other crypto projects, many of which do have real merit and far more ingenuity than I could ever hope to conjure. We just need to remember that decentralization was a principle intended to give people financial autonomy and freedom from the wishes of a central, trusted party, not an ideology to adhere to with the utmost purity.
Decentralization was never meant to elevate to deity status, and let’s keep it that way.
