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Has Decentralization Become the Panacea?

Thanks to the growing popularity of Bitcoin and other virtual currencies, the word decentralization has become the latest fashion in almost all business sectors. If one thinks a startup will be a failure, he will simply put it:

 ” This is not decentralized.”

Decentralization enthusiasts boast that the Internet itself is the very child of decentralization which they believe is the panacea for all business sectors. But if you ask them what exactly decentralization is, they would act like:

” How could you ask me such a silly question? Isn’t it the most natural thing in the world?”

And they would tell you a good example of decentralization is Wikimedia, a free encyclopedia, created and edited by volunteers worldwide and it’s considerably better than Encyclopedia Britannica in every way.

If you don’t want to miss a chance to embarrass them, you could go on asking them:

“Have you ever edited anything on Wikimedia? Do you even know where is the edit tab of a Wiki page?”

That is not to say I am against decentralization; my point is that we should not seek decentralized solutions for everything we do. This is too extreme.

I never know a thriving community without a centralized core leadership. In the case of Wikimedia, the editor group is more important than volunteers around the world. I never know a developed country favors real democracy. Decentralization doesn’t necessarily mean the elimination of centralization. It is not centralization itself but deprivation of rights that we oppose.

I believe that centralization of power is a must be in a decentralized mechanism. We work to empower the public through decentralized methods.

Many people go so far as to believe decentralization is the sole criterion for justice and success. This is sheer nonsense.

For example, Bitcoin, a decentralized digital currency, is indeed a good investment, but it would be silly to believe it will ultimately evolve into a mainstream currency.

It’s not hard to understand when you think of the nature of money is a medium of exchange that is used in everyday life. Bitcoin, however, is isolated from the real world. Unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life.( an investment product)

Just like those peer-to-peer finance startups claiming to trump traditional banks, but work as intermediaries do. And chances are they are more likely to abscond with money.

Put simply, decentralization does not guarantee success. No matter how decentralized a product is, it is still a disaster if users fail to find anything fascinating in it.

Next time, stop saying this is not decentralized, instead, tell them:

Even if decentralized, it still has no future.”

COMMENTS(29)

  • Doofus
    5 months ago Doofus

    A chinese economist recently said that” Thanks to the growing popularity of Bitcoin,the word decentralization has become the latest fashion in almost all sectors. One will simply say “it’s not decentralized” to reject a project. But can decentralization guarantee success? Or have you ever seen a country truly favors decentralization? http://news.8btc.com/has-decentralization-become-the-panaceaPlus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。

  • iamTom123
    5 months ago iamTom123

    Decentralization has indeed a very fashionable idea and this is affecting not just the cryptocurrency industry but also aspects of our culture. We all know that decentralization can have many advantages but it does not mean that it has no disadvantages as there is no such a thing that can solve all the things that ill humanity since the beginning of time. The creation of empire in the past was a form of centralization and when locals started their own rebellion and then got their own form of government that can mean detaching from centralization and adopting decentralization. The idea of decentralization is not so new, after all.

  • dinofelis
    5 months ago dinofelis

    Quote from: Doofus on April 26, 2017, 08:46:47 AM
    A chinese economist recently said that” Thanks to the growing popularity of Bitcoin,the word decentralization has become the latest fashion in almost all sectors. One will simply say “it’s not decentralized” to reject a project. But can decentralization guarantee success? Or have you ever seen a country truly favors decentralization? http://news.8btc.com/has-decentralization-become-the-panaceaPlus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。

    Decentralization is a political notion: the absence of pre-established hierarchy and leadership.  We have several examples of very successful decentralized systems: life and biological evolution, science, and the free market.  Libertarians have as a political agenda, the decentralization of state.  However, in all decentralized systems, there are also power vacuums, that can give rise to centralisation.  In biological evolution, it might very well be that human dominance put an end to the decentralized evolution paradigm, once we will have eradicated all other life forms on this planet, not under our centralized genetic control ; in science, it may very well be that after an era of free scientific activity, scientific authority will be re-placed under centralized control, like religion used to be, and in the free market, we know that there are economies of scale and lobbying that bring about natural monopolies.  We also see that bitcoin’s structure has immensely centralized mining, and has always been centralized on the protocol side by core.So it might very well be that not many systems remain decentralized for ever, and that most, if not all, dynamical properties of decentralized systems ultimately lead to central power.

  • Xester
    5 months ago Xester

    Quote from: Doofus on April 26, 2017, 08:46:47 AM
    A chinese economist recently said that” Thanks to the growing popularity of Bitcoin,the word decentralization has become the latest fashion in almost all sectors. One will simply say “it’s not decentralized” to reject a project. But can decentralization guarantee success? Or have you ever seen a country truly favors decentralization? http://news.8btc.com/has-decentralization-become-the-panaceaPlus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。

    Bitcoin being decentralized will continue to exist but cannot reach a mass adoption unless it will subject itself to the control, and regulations by the different states. Bitcoin will soon be centralized and it cannot escape that idea since many are moving to make it centralized and get hold of bitcoin by using their wealth. Let us just accept that fact that nothing is decentralized that will be able to sustain itself free from the eyes and control of the states.

  • lurker10
    5 months ago lurker10

    Decentralization in crypto necessitates relying on many coin projects. One coin takes it all approach leads to premature centralization and death of the movement.Free market is going to sort the wheat from the chaff.

  • dinofelis
    5 months ago dinofelis

    Quote from: lurker10 on April 26, 2017, 09:09:47 AM
    Decentralization in crypto necessitates relying on many coin projects. One coin takes it all approach leads to premature centralization and death of the movement.Free market is going to sort the wheat from the chaff.

    I very much agree with that viewpoint.

  • davis196
    5 months ago davis196

    Quote from: Doofus on April 26, 2017, 08:46:47 AM
    A chinese economist recently said that” Thanks to the growing popularity of Bitcoin,the word decentralization has become the latest fashion in almost all sectors. One will simply say “it’s not decentralized” to reject a project. But can decentralization guarantee success? Or have you ever seen a country truly favors decentralization? http://news.8btc.com/has-decentralization-become-the-panaceaPlus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。

    I don`t agree that decentralization “has become” a panacea.The decentralization has always been a solution for the economical and financial problems.Decentralized systems are always more effective than the centralized systems.

  • Qartada
    5 months ago Qartada

    Quote from: Xester on April 26, 2017, 09:01:08 AM

    Quote from: Doofus on April 26, 2017, 08:46:47 AM
    A chinese economist recently said that” Thanks to the growing popularity of Bitcoin,the word decentralization has become the latest fashion in almost all sectors. One will simply say “it’s not decentralized” to reject a project. But can decentralization guarantee success? Or have you ever seen a country truly favors decentralization? http://news.8btc.com/has-decentralization-become-the-panaceaPlus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。

    Bitcoin being decentralized will continue to exist but cannot reach a mass adoption unless it will subject itself to the control, and regulations by the different states. Bitcoin will soon be centralized and it cannot escape that idea since many are moving to make it centralized and get hold of bitcoin by using their wealth. Let us just accept that fact that nothing is decentralized that will be able to sustain itself free from the eyes and control of the states.
    State regulation doesn’t mean centralisation at all.  Centralisation will only be when one or all of the aspects of Bitcoin are concentrated in the hands of one or a few parties.The only situation in which state regulation would equate to centralisation is if it spent billions and billions of dollars worth of their respective currencies to act on:-Mining centralisation-Node centralisation-Transaction centralisation-Developer centralisation (easily achieved with mining centralisation)Achieving all of those things at once is monumentally difficult.

  • hello_good_sir
    5 months ago hello_good_sir

    I think that decentalization is not a Panacea, but it is indeed a very important factor in every case.As we could have already spot, there is no doubt that every single currency of any goverment is not decentralized which is kind of obvious. The country needs it’s own determinant value to give an ability to inhabitants to buy anything they want with that currency, and the issue is about who and how broadcasts the money among the society.For every single cryptocurrency, decentralization is something necessary (in my opinion) because only in such a case, the value is dependant only on market and the supply/demand rules.That’s why I think it is so crucial for any alt to be completely decentralized.

  • BitcoinAllBot
    5 months ago BitcoinAllBot

    Here is the link to the original comment thread. Or you can comment here to start a discussion. Author: 8btccom

  • Iranus
    5 months ago Iranus

    Quote from: hello_good_sir on April 26, 2017, 04:01:02 PM
    I think that decentalization is not a Panacea, but it is indeed a very important factor in every case.As we could have already spot, there is no doubt that every single currency of any goverment is not decentralized which is kind of obvious. The country needs it’s own determinant value to give an ability to inhabitants to buy anything they want with that currency, and the issue is about who and how broadcasts the money among the society.For every single cryptocurrency, decentralization is something necessary (in my opinion) because only in such a case, the value is dependant only on market and the supply/demand rules.That’s why I think it is so crucial for any alt to be completely decentralized.
    The problem is that any failure in decentralisation (from any part of Bitcoin) leaves it open to control from third parties because it’s easier to talk to the people that have power.For example, we know that miners can cause changes in the protocol – what would happen if governments could just tell a few public individuals to comply or they’ll put them in prison?

  • uneng
    5 months ago uneng

    I’m not sure if it’s fashion, it’s a functional idea which guarantees better results for all involved persons. But as most persons in the world are like sheeps, decentralization will only have success if it becomes fashion, so all the fools will follow the idea as well (in this case a good idea [looks a good one]).Only few persons decide for all the rest, that is how it works and that is what most persons want, others deciding things for them.

  • Hydrogen
    5 months ago Hydrogen

    Considering US healthcare is expensive and unaffordable to many due to monopolies in the healthcare industry.And that much evil in the world is a result of centralized monopolism of government power or other power/resources.The natural reaction may be to break up those centralized monopolies in favor of a decentralized approach.

  • C1aranMurray
    5 months ago C1aranMurray

    “I believe that centralization of power is a must be in a decentralized mechanism. We work to empower the public through decentralized methods.”

    Cindy speaks the truth.

    Centralise power but make it accountable. The accountability part is something humanity has been working on since the French revolution. Crypto-anarchists want to rip all this progress up in the name of decentralisation but everything naturally centralises anyway. Bitcoin’s future path is decided by Jihan and the exchanges (economic nodes as Bitcoiners like to call them). Devs/users/citizens can propose changes until the cows come home but it’s the money people who decide what code gets committed and these money people aren’t in any way accountable to users. Does this really count as progress?

  • aribolab
    5 months ago aribolab

    Hear, hear

  • Sundark
    5 months ago Sundark

    Quote from: Doofus on April 26, 2017, 08:46:47 AM
    Plus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。
    If we are basing this prediction on current bitcoin situation then it is totally correct. Bitcoin will be an investment product, BTC is already evolving (or rather is stagnating) in that direction.Because of innate characteristic of BTC, 10 minutes blocks, low tx limit, it was never fit to be publicly accepted payment method anyway.

  • Naokia980
    5 months ago Naokia980

    Dont ignore the fact: Decentralized systems are always more effective than the centralized systems. That is why we all use coins instead of real cahs in internet

  • Shady
    5 months ago Shady

    Decentralized with proper representation can easily turn to gold, but still be valuable without.It takes life to determine what is better, but with any hiearched structure in comparison there’s not much else better than the good ‘ol free way.Try to make the most out of what you have to then open yourself up. The held value can be perceived as unprecedented when in the right place at the right time.

  • dinofelis
    5 months ago dinofelis

    Quote from: Sundark on April 26, 2017, 06:54:34 PM

    Quote from: Doofus on April 26, 2017, 08:46:47 AM
    Plus, he said unless the meaning of money is redefined, otherwise the fate of Bitcoin will remain as it is for life——an investment product。
    If we are basing this prediction on current bitcoin situation then it is totally correct. Bitcoin will be an investment product, BTC is already evolving (or rather is stagnating) in that direction.Because of innate characteristic of BTC, 10 minutes blocks, low tx limit, it was never fit to be publicly accepted payment method anyway.

    The real problem of bitcoin is not so much technical (that doesn’t help), but the doctrine of a finite number of coins, of which most have been emitted when it was cheapest ; in other words, an extremely deflationary asset with huge seigniorage, that automatically leads to hoarding and a deflationary spiral.Bitcoin was designed as a speculative hoarding asset, not as a currency.

  • dinofelis
    5 months ago dinofelis

    Quote from: Naokia980 on April 26, 2017, 06:55:55 PM
    Dont ignore the fact: Decentralized systems are always more effective than the centralized systems. That is why we all use coins instead of real cahs in internet

    We don’t.

  • piloder
    5 months ago piloder

    But recently many programs and ponzi have popped up with the name of decentralization/blockchain which are not able to deliver anything new. Almost all of those programs are trying to scam newbies using word decentralization and blockchain.

  • bertani
    5 months ago bertani

    Ironically, this is somehow related to a tweet we (Oraclize) wrote just few hours ago 🙂

  • laughing__cow
    5 months ago laughing__cow

    Taleb has had some great blog posts in this recently. “Skin in the game”.

  • C1aranMurray
    5 months ago C1aranMurray

    Link a brother up.

  • laughing__cow
    5 months ago laughing__cow

    https://medium.com/@nntaleb/real-life-is-risk-taking-ac424efd5fcc?source=linkShare-2d6f142ff3cc-1493223862

    Here you go. Check out his other stories – past few months have been focused on that topic (new book I guess).

  • mindrust
    5 months ago mindrust

    Bitcoin is not decentralized. It was designed to be decentralized at first but ASICS companies destroyed the idea. Satoshi wanted everybody with a PC to contribute to the POW system but after ASICS miners came, it became big companies’ business. And there isn’t even a competition left now. Bitmain killed every other company out there. So how is it decentralized?You’ll understand this when Wu’s miners gang support of BU becomes >%50. Our only hope is the community now. If they choose the easy way and go after Wu, bitcoin will be another centralized piece of shit paypal copy.

  • Doofus
    5 months ago Doofus

    Quote from: mindrust on April 26, 2017, 09:07:55 AM
    Bitcoin is not decentralized. It was designed to be decentralized at first but ASICS companies destroyed the idea. Satoshi wanted everybody with a PC to contribute to the POW system but after ASICS miners came, it became big companies’ business. And there isn’t even a competition left now. Bitmain killed every other company out there. So how is it decentralized?You’ll understand this when Wu’s miners gang support of BU becomes >%50. Our only hope is the community now. If they choose the easy way and go after Wu, bitcoin will be another centralized piece of shit paypal copy.
    since u mentioned Wu, some say he should be put in jail. He is been suspected of blocking segwit on purpose.

  • Doofus
    5 months ago Doofus

    Quote from: piloder on April 26, 2017, 07:33:06 PM
    But recently many programs and ponzi have popped up with the name of decentralization/blockchain which are not able to deliver anything new. Almost all of those programs are trying to scam newbies using word decentralization and blockchain.
    exactly, all they have is a concept and they with that, they easily scam 100 btcs.

  • Yakamoto
    5 months ago Yakamoto

    Decentralization is likely going to end up as a meme if not properly implemented into the right industries. Decentralization is not a good thing for everyone and everything. While Bitcoin is showing that it is quite effective as a decentralized piece of financial technology, there are few applications outside of something like this (aside from management) where decentralization is a net-gain.It has its applications, but it is not the end-all-be-all for everything.

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