The problem of Decentralization - 1
At the core of a successfully decentralized platform (“D-platform”) is a broad and deep enough distribution of a network of participants in order to prevent take over or manipulation of the platform. This problem is referred to as PBFT, Practical Byzantine Fault Tolerance. For any D-platform, as well, this feature must be guaranteed to exist in perpetuity. The first and best example of an attempt to solve this problem is Bitcoin. The original utopianist view was that a world-wide group of unassociated people would run the infrastructure at their own expense and be financially rewarded for doing so. The project, as the pseudonymous Satoshi Nakamoto described, has wholly failed. Bitcoin (and other “Proof-of-Work” applications) is now fully vulnerable to PBFT failure. The effective control of Bitcoin is nearly completely centralized and the control extends from block validation/hash issuance to design of mining hardware up through control of massive warehouses of mining rigs, and to location. This is China, Inc. (For details, see my further writing on this subject)
Nevertheless, “decentralization” has been trying to move on, partly to solve the concentration of control problem and partly to solve practical matters such as scalability and throughput for transactions. For at least the last 4 years there has been universal (if not universally acknowledged) agreement that PoW and even PoS (Proof-of-Stake) have failed as means of achieving decentralization. This has taken place even at the same time more and more people have become aware of and believers in crypto and decentralization, which rely entirely on these approaches.
Individual schemes to solve these problems have proliferated at an enormous pace and even whole new categories and variants of approach are also proliferating: PoW, PoS, PoR, PoA, DPoS, PoET, SMR, BEAT, etc. The number of projects can likely now be counted in the thousands. No single technology “challenge” in history has generated such a large number of attempts at a “problem’s” solution and been the object of so much investment (of dollars and talent) and still lacks a single significant application/success in any area of human activity.
One has to assume that there are large numbers of people who believe that at some point quantity of effort and money will result in quality and miraculously a solution will emerge. At this point, realistically, it is certain that nothing will emerge to solve this problem. If there is no mechanism to assure permanent randomization and distribution of transaction validation, control of platform will always rest largely if not entirely in some group. In other words, the problem itself is not primarily a technical one, it is a problem that is both deeply technical and deeply human-dependent together.
The problem of Decentralization - 2
It’s the infrastructure, stupid. Although logically this should appear as problem 1, it seems never to occur first to many proponents of Decentralization. But it seems easier to bring it up once the owner/participant/proponent of the project has had a chance to proselytize.
But, truly, this does belong at the beginning since it is the core absurdity of so many Decentralist beliefs. To wit: Any modern digital platform of any kind is inseparable from infrastructure and hence whoever controls all or most of that infrastructure. Yes, it sounds like “yeah, of course”. But I cannot tell you the number of times very smart people have entirely ignored this when explaining passionately the objective of circumventing the control by Nation States, Governments, Regulatory oversight, etc. For the 100th+ time, yesterday, I was being told by a seriously well-funded and very smart founder with a “whole new” decentralized platform design telling me about how he was going to use it. For example, it would be used to solve the problem in Africa, etc. of land registration ownership, birth certificates, house purchases, drug/diamond/oil/etc. authenticity because there was so much corruption in the government. I then asked him who controlled the infrastructure (electricity, ISPs, cloud, telecom, etc.) which the platform and user needed. The “Duh” moment had arrived. This last session was a Google Meet session and I thought it had frozen up, since there was no sound or movement for at least a minute while it sunk in. And then he had to go and speak to one of his investors.
The problem of infrastructure extends also to the value exchange infrastructure, currency or barter. For a person using a decentralized platform to transact anything of value, it has to be so extensive that the purchase and sale of ordinary and any good has a counterparty using the same platform and willing to make the specific exchange. This then requires a critical mass at least of counterparties distributed across a range of commodity and goods. Nowhere is this even remotely in prospect. And if it were, then it would require the above prerequisite agreement on the part of those controlling infrastructure, i.e., the government.
The problem of Decentralization 3
Typically, conversations related to Decentralization end with the previous problem. I don’t want to sound arrogant or unsympathetic to religious believers, but this moment (if it gets that far) is very like when you point out some major flaw of fact and/or reason to a religious person that casts doubt. If I am so lucky to continue, I move on to what really hangs over the decentralization project in general: WHY? This is the realm of politics. Core to most believers is in one way or another a belief (often held in the same way as a religious belief) that it is good and necessary to put any or all of the possible activities that could run on decentralized platforms beyond the reach of the government and/or corrupt corporate elite.
In the countries where this is very true or truer, the usefulness of having the benefit of a trusted platform free of government/elites control might seem to be a good thing. But it is also almost always the case that the government and/or elites can and will deprive the presumed beneficiaries of the ability to circumvent the corrupt system or punish those who try. And they almost always easily have the means to do so and worse: the government and the elites are the ones who can position themselves easily to benefit most from access. In the case of crypto, for instance, it is precisely the corrupt government members and elites who are positioned to benefit most and often the only ones. In such countries, trading in resources and having access to hard currency is typically exclusive to them. And hence they benefit vastly more and the consequences are always worse for the country and people. See Venezuela.
Ultimately, in open and reasonably well-functioning liberal democracies, the notion of Decentralization’s objective is contrary to the functioning of participatory and responsible governance and contributes to the undermining of belief in open societies. The use of Decentralization would tend to distract and excuse and take away pressure on the governing/elite classes to respond to its citizens through elections, factual and free presses and activism. In existing authoritarian and corrupt political systems without free and open democratic processes and systems, Decentralization can be easily taken away or monopolized by those in power.
The “decentralization” revolution is headed to the ash heap of history. It is time to redirect the vast amounts money and talent somewhere else where more pressing problems for now and the future could use these resources.
