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Decentralization is hard because centralization is so easy. The downsides of centralization are mostly longer-term issues like moral hazard, privacy, cost of s

by api 5y ago

Decentralization is hard because centralization is so easy. The downsides of centralization are mostly longer-term issues like moral hazard, privacy, cost of scaling, and robustness, and those can be ignored for a while. Up front centralization is incredibly easy to reason about and deploy while the costs can be ignored for a long time. Markets optimize for cost and efficiency now, not later. It's the same reason things like climate change or the eventual danger of fossil fuel depletion are ignored by the market. They haven't happened yet. Centralization is cheap coal; decentralization is solar power and batteries. Pay later vs. pay now. Pricing signals and markets are great optimizers but they have very little foresight and can't consider issues that can't easily be priced. As a result even if a system is designed to be decentralized, centralization will usually start creeping in. It starts at the edges with convenient SaaS APIs, value-add services like search and filtration, and dashboards and moves inward from there. Eventually the entire system is embraced, extended, and extinguished. It doesn't matter if anyone planned it this way. It happens organically because centralized systems are cheaper and easier to build and can iterate fast. The last part, fast iteration, is massively important in today's fad-driven hyper-accelerated shifting sands software market. If something can't iterate fast the sand will get washed out from under it and it's dead.

mw888 5y ago
It’s a fair point, they to bring it back to basics a Bitcoin maximalist still has a point: do you want the money in your centralized, easy to use bank under control of a private bank down the line, or in control of a predictable and permanent protocol? The truth about web3 is that much of it will remain centralized or peer to peer, but the fallback to certainty is the ultimate value; avoiding the long term moral hazard you mentioned the market often ignores, or at least deterring it. There will always be people who prefer control over convenience and distributed ledger technology hopes to raise that ceiling of user control over what they own significantly.

by api 5y ago

mw888 5y ago

It’s a fair point, they to bring it back to basics a Bitcoin maximalist still has a point: do you want the money in your centralized, easy to use bank under control of a private bank down the line, or in control of a predictable and permanent protocol? The truth about web3 is that much of it will remain centralized or peer to peer, but the fallback to certainty is the ultimate value; avoiding the long term moral hazard you mentioned the market often ignores, or at least deterring it. There will always be people who prefer control over convenience and distributed ledger technology hopes to raise that ceiling of user control over what they own significantly.