Why Decentralization Matters Now More Than Ever
Our world looks much different than it did a year ago. The shocks of 2020 are still fresh in our minds, but remembering our world as it was a decade ago in 2010 is truly night and day. Uber was still in R&D mode, DoorDash was not even a company, and voice assistants like Alexa were still a futuristic concept. Centralized corporations fueled this decade of disruption through a vicious cycle of consumer naïveté and corporate greed— but times have changed, and decentralization matters now more than ever.
A decade of disruption followed by a decade of decentralization. — Balaji Srinivasan
The seeds of the “Centralization Problem” began to bloom with the Google IPO (2005), which coincided with the hatching of Facebook and Amazon Web Services (AWS). Today, Google owns 90% of search and roughly the same proportion of buy and sell-side ad-tech. Facebook controls 60% of social media and AWS hosts 40% of the Internet. The moment FAANG started cordoning off the internet for our ease and entertainment, commentators started to point out that these kumbaya network effects would turn on us.
In Chris Dixon’s from 2018 blog post — Why Decentralization Matters — he shows an S-curve that models the extraction relationship between tech platforms and users (the farther to the right, the more platforms extract from users) was flattening; in other words, more and more value was being stripped from users over time. But it’s not just users. Platforms are n-sided marketplaces so the same goes for all businesses, developers, and creators that rely on centralized platforms.
This is problematic for an ever-growing number of reasons. Many companies have gone out of business overnight after losing access to Facebook, Twitter or LinkedIn’s API. Sudden co-opting of data by Big Tech showed us that oligarchs can “flip-the-switch” on sweeping network-wide policies as they see fit. And if you were one of 28 million Fitbit users at the time they were acquired in 2019, your sensitive health data was suddenly the property of Google. These real world examples exist in an unthinkable amount of permutations — over the past decade, we have stomached it all but the ongoing mass migration from WhatsApp-to-Signal shows that we are now at a tipping point. Decentralization is not just a concept anymore, but a personal choice.
On January 6th, 2021 the power of centralized platforms was manifested in the de-platforming of Donald Trump on Twitter/Facebook and subsequent shutdown of Parlor by AWS and others. Regardless of what side of the aisle you are on, the fact that these decisions were made by a small group of people that represent a majority of our global wealth but only a micro-fraction of our global population is problematic. Even Jack, the definitive authority behind Twitter, is unclear where to go next from here:
The difference between a dictatorship and a democracy is clear in theory, but the layering of dictator-run topologies on democratically-run geographies has blurred our perspective of real/digital life and led us to a standstill. Simply letting things all pan out will subsume us into a modern Government-IT Infrastructure Complex, where a few large entities are influenced behind-the-scenes rather than through the rule of law. We have already had this in the payments space for a while where instead of targeted interventions against actual abuses, payment providers withdraw wholesale support for companies in certain categories. How can we break these shackles?
“If you control the code, you control where the data is being processed. It, therefore, doesn’t matter if the data is decentralized at first; it will eventually centralize to the place where it’s processed and manipulated.” — Andreas Antonopolis
Our future Web 3.0-based society must embed decentralization across the full-stack, starting with the interactions between people to the Internet of Things (IoT). At the end of the day, what we care about is maximizing human well-being as we march down the cosmic highway. Big Tech may not be inherently evil, but the centralization of the Internet is affecting society in ways we are only just beginning to understand. In the same way the centralization of power throughout history pushed us towards democracy and open markets to improve human well-being, so too will the concept of digital power migrate to decentralization. But we are not at the end of the road — we are just at the end of the beginning, and the decentralized journey that awaits us will make our world a better place.
About IoTeX
Founded as an open-source platform in 2017, IoTeX is building the Internet of Trusted Things, an open ecosystem where all “things” — humans, machines, businesses, and DApps — can interact with trust and privacy. Backed by a global team of 30+ top research scientists and engineers, IoTeX combines blockchain, secure hardware, and confidential computing to enable next-gen IoT devices, networks, and economies. IoTeX will empower the future decentralized economy by “connecting the physical world, block by block”.