What Does Decentralization Mean To Me: IT'S EVERYTHING

I've been involved with a few blockchain projects. Some of them from the very early stages. I still actively contribute to FinNexus and am an active part in the investor communities of some projects I truly admire like Thorchain and Tellor. The overarching theme of these projects that I care so much about is one thing: Decentralization.

When I first started investing and contributing to blockchain projects, I didn't think this feature was so important. Upon retrospect, I realize that was pretty short-sighted of me. But I thought that creating a robust token economy was the key to delivering value to token holders. After years of trying to push the blockchain space forward (it's been like banging my head against a brick wall during this bear market tbh), I've come to realize that you can't have a robust token economy without decentralization (or at least a clear path to decentralization in the future).

So, to answer the question posited by @theycallmedan today, What does decentralization mean to you, is it important, why? I provide a simple answer:

Decentralization is everything.

To understand the importance of this statement, we have to understand what decentralization means within the context of a blockchain project.

First and foremost, it should mean decentralization of the servers that provide the infrastructure necessary to support the blockchain. If there are too few block producers (or miners or Witnesses or Super Representatives or whatever you want to call them) and/or the threshold for becoming such is too high, then the system is not decentralized enough and will inevitably have issues with governance. As the value at stake increases, the likelihood of governance snafus increases exponentially.

Second, it should mean decentralization of the token supply. If we are just recreating another oligarchic scenario like the real economy, where the top 1% hold 44% of the wealth, then really what the fuck are we doing here? We can just go transact value in the real world and be screwed over without all the complications of technology.

Lastly, it should mean decentralization of the community. The community that supports a blockchain project should be as globally, ethnically, and socio-economically diverse as is possible. Dissenting views should be treated with respect and not tribalism. Forthright discussion should be valued above and beyond slavish idealism.

Another point that should be emphasized is that centralization has some pretty negative characteristics, although it should be noted that the rule of negation does not necessarily apply here. Just because centralization is bad does not mean that decentralization solves those issues.

Centralization is constricting.

First, centralization offers a single point of blame. When Shawn Fanning came up with Napster so that we could all enjoy free music file sharing, the regulators sued him into oblivion and forced him to shut down the service. Digicash and e-gold suffered the same fate.

Second, centralization offers a single point of attack. When Mt. Gox was pretty much the only game in town to acquire bitcoin, it served as a huge honey pot for all the hackers in the world. It eventually fell prey to its success. MakerDAO and Uniswap suffer from the same traits in the DeFi world today. So far they have weathered the attacks well. But how long can that last?

Lastly, centralization is limiting by its very nature. The systems governed by a single or concentrated authority rarely, if ever, provide enough flexibility to accommodate creative innovation. That's why it's difficult for big companies to come up with anything new. Or even if they do, like Kodak (whose digital camera invented in 1975 is shown above) or Xerox, they ignore it because it is in their best interest to do so.

Conclusion

Thus, to summarize, decentralization is paramount because the alternative, centralization, is pretty terrible at pushing society forward. Centralization can be good for getting projects off the ground, conducting quick experiments, and implementing a basic level of security. However, in the long run, such systems are easily corruptible.

Blockchain technology should, ultimately, be used as a tool to improve global society. We should be using this breakthrough to level the playing field so that intermediaries no longer take advantage of people that, for whatever reason, remain in the dark. Most of what contributes to the rich-poor gap in our world has to do with information asymmetry. Blockchain was built to prevent exactly that by forcing increased transparency on and providing increased access to all participants in an economy.

If we aren't reinforcing that with every single action that we do in our crypto communities, then we're just wasting our time. Or trying in vain to get rich by shady means.