The Unknown Path to a Decentralized Future

Some companies with currently centralized services have been criticized for issuing tokens and raising money in ICOs. There are even allegations that venture investors are pushing companies to do so as a ploy for liquidity. I suspect that some situations like that do actually exist, but I know from first hand conversations that many of the entrepreneurs pursuing this route are doing so out of a genuine conviction that it is the right path to a decentralized future.

Most startups that have come into the crosshairs of one of the large centralized players (Google, Facebook, Amazon, Apple and maybe a few others) have experienced how difficult it has become to grow a new offering. The new incumbents are aggressively managed, have nearly limitless financial resources and most importantly leverage their existing network effects to keep potential competition at bay.

Along come blockchains and crypto currencies. Here is a new technology that represents a foundational breakthrough: the ability to build decentralized networks that have consistent data without being controlled by a corporate or government entity. It is a technology that is potentially disruptive to the large players, exactly because it goes against the core of their existing businesses, which is the control and rent extraction from networks.

Now there are two schools of thought as to how to get to that decentralized future where networks are owned by their participants and anyone can innovate on top of the network. One group believes that we need to start from scratch and build new protocols outside existing services. There are good arguments for that position, such as being able to iterate on a protocol with few users on the basis of feedback from early adopters. Another group though believes that existing services, some with millions of users, can give a new protocol immediate critical mass. They also point out that it may be possible to take a stepwise path where some centralized elements remain at first (for instance, ones that demand throughput right now that’s not yet achievable on blockchains) with a view to decentralizing those elements in the future.

I believe we should be pursuing both approaches. Getting to a decentralized future is too important to restrict right now how we are going to reach it. We will know in a decade or two what worked, but until then we shouldn’t be attributing ill intentions to fellow travelers simply for choosing a different path. We can be critical of specific steps and proposals. We can suggest how they might be improved. We can demand (increased) transparency. We can start or fund or own efforts. By all means: let’s do more, rather than less.

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