[Note: Part 1 is here.]
Without centralization, everything falls apart. Your house, your family, your body, your school, and so much else. Good or bad, humans need centralization. We naturally seek out authorities of all types to provide direction and give us permissions while we search for meaning in our lives. Sometimes the authority is a structure, a concept, a religion, tool, system, or entity.
The question is, ‘Who or what is it centralized around?’
Everything that you think of as decentralized is centralized in some way, whether or not you notice it. If it exists then it derives its power from somewhere and is dependent on something else. When people use the term ‘decentralization’ they really mean, ‘the distribution of power and authority’. They’re not, however, talking about non-centralization or even the fair distribution of power and authority among participants. Humans have a hard time removing themselves and their friends from power and control.
Similar to how the methylene chloride in nearly all ‘decaffeinated’ beverages is worse for you than the actual caffeinated counterpart, the process of decentralizing something makes the thing worse. That is because it isn’t non-centralized but re-centralized to where you can’t see the control mechanisms.
A truly decentralized technology is non-centralized. It is like water. Formless and shapeless, it is open to everything and attached to nothing. Useful to everything, it becomes a valuable resource.
It has no partners, advisers, or friends. True decentralization has no obligations to anyone nor offers any special considerations.
It has no official channels, because it is not official. The only channels for it are those offered by its community. Its community manages itself, not a ‘team’.
There is no core team with more power and authority than other teams who could join and add value. If a team disappears, it won’t have any material effect.
No one entity has control over it. There is no single point of failure or attack.
Non-centralization distributes what humans cannot help but centralize: — power and authority — in a way that is commensurate with a participant’s input. It should periodically reset, allowing productive new entrants to the system the ability to wield more power than unproductive incumbents.
Although we cannot create something absolute (i.e., something that doesn’t depend on anything else) we can create a system that serves as a fundamental building block for just about everything you can think of. Digital water, if you will.
This ‘digital water’ system — the SHIRE — is structured in two parts:
1) A platform that allows users to create P2P economies of any type, creating credit for themselves rather than servicing debt. This is the incentive mechanism that will allow it to self-organized and self-regulate.
2) Smart contract-based artificial intelligence — called Syntels — that will, along with humans, participate in P2P economies and help to grow the system. The first P2P economy will be the language that the Syntels use.
The Sleight Of Hand Of Re-Centrailization
In crypto, decentralization is as much a sleight-of-hand as it is anywhere else the term is applied. The appearance of something being community-run allows the public to trust it more than they did other, more obvious forms of authority.
This de-centralization is merely a method to obscure power and authority, not distribute it. I call it re-centralization.
Re-centralization: the obfuscation of power and authority using technology to externalize and distribute bureaucratic processes among participants to give the appearance of control, increasing their trust and loyalty and, thus, increasing power and profits for those who control the system.
If, for example, any participant is paying more to use a ‘decentralized’ system than they would the centralized version, it’s not decentralization but re-centralization. You’re just willing to pay more for the ‘greener’ version because you think it’s organic, less processed, but somehow should be more expensive because of it.
A million-dollar transaction that would cost someone $0 in fees with a stock broker might cost them tens of thousands of dollars in fees in the world of crypto. And while someone with $1 can open an account with just about any stock brokerage, a low-value transaction on a decentralized exchange such as Uniswap becomes impractical (although there are many instances of people paying 1000% or more in fees). Is this decentralization?
With re-centralization we must look for shifting costs, economic or otherwise. One example is a ‘permissionless’ system.
‘Permissionless’ systems simply change the type of permission that is needed. While you were focused on the illusion of transparency (e.g., open governance without audit trails), permission has been shifted from an authoritarian model — such as those found in modern corporations — to an economic one.
Instead of having to ask for permission to use a network, for example, the new ‘permissionless’ model makes it open to anyone… who can afford it. Who usually wins with auction-style pricing?
Without the high fees and inflated asset prices, however, this new interpretation of decentralized finance wouldn’t be possible. But of course, DeFi is not supposed to be a system that would allow the possibility of the poor to be robbed by the rich, so to speak. If it does, it is only a re-centralization that is working as intended.
The many thousands of everyday people on the receiving end of this bonanza to the tune of millions and even billions of dollars aren’t doing much, if anything at all, for those left out of the game. Meanwhile, society is being disrupted and no one who’s ‘getting rich’ wants to notice. That’s how the last batch of ‘elites’ was created, no?
The Fundamental Problem Is Us
The fundamental problem in all of this is our own ignorance and stupidity.
Although it is rational to assume that human nature has allowed us to survive this long and so is not as much of a problem as one might think, it is not rational to assume that it will be this way forever.
As the pace of technological change increases, the worst of human nature is more easily facilitated while providing little benefit to the best of it. As our tools become smarter, we become dumber. We have already passed the point of concern for our own well-being as a species. Sooner or later, we will cross the technological Rubicon where it will be very difficult, if not impossible, to know how to undo what has been done.
Leveraging artificial intelligence and a new kind of economic framework, we can solve the second most fundamental human problem for everyone on the planet — the need to make more money — while indirectly resolving the first.