1aeb065 · urbit.org · git.iko.soy

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6author = ""

7ship = "~lableg-tadrex"

8−image = "https://storage.googleapis.com/media.urbit.org/site/posts/essays/2021-11-18-the-promise-and-paradox-of-decentralization.JPG"

8+image = "https://storage.googleapis.com/media.urbit.org/site/posts/essays/promise-of-decentralization.JPG"

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11−![Presentation](https://storage.googleapis.com/media.urbit.org/site/posts/essays/2021-11-18-the-promise-and-paradox-of-decentralization.JPG)

11+![Presentation](https://storage.googleapis.com/media.urbit.org/site/posts/essays/promise-of-decentralization.JPG)

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13Every so often, a platform will do something outrageous—changing its terms of use, kicking off API partners, restricting [the content category it was built on](https://www.theverge.com/2018/12/3/18123752/tumblr-adult-content-porn-ban-date-explicit-changes-why-safe-mode), banning Donald Trump, failing to ban Donald Trump, etc.—and we'll all realize we're utterly dependent on centralized entities that can make arbitrary and unaccountable decisions. Sure, you can build your own minimal Facebook or Twitter clone, if you really want, but can you build your own Cloudflare? How about your own payment network? If your company does something legal in your country but banned in America, and the US decides to sanction you, which leads to local banks cutting you off because they can't survive without access to the dollar, are you going to build your own reserve currency? Your own Taiwan Semiconductor Manufacturing Co. or ASML?

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18

19The promise of a decentralized system is that anyone can build anything they want, because no one owns it. There are three important features of this; two downsides and a caveat:

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21−The first downside to "Anyone can build anything" is that "anyone" means anyone, and the people to whom decentralized systems are the most attractive are the ones who are banned from other systems, often for good reasons. Free speech absolutists want to be defending Aleksandr Solzhenitsyn or Eugene V. Debs or even Lenny Bruce, but if you want to get a sense for the typical piece of content enabled by a totally uncensored communications system, check your spam folder.

21+- The first downside to "Anyone can build anything" is that "anyone" means anyone, and the people to whom decentralized systems are the most attractive are the ones who are banned from other systems, often for good reasons. Free speech absolutists want to be defending Aleksandr Solzhenitsyn or Eugene V. Debs or even Lenny Bruce, but if you want to get a sense for the typical piece of content enabled by a totally uncensored communications system, check your spam folder.

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23−The second downside is that a lack of ownership means that no one is responsible when things go wrong. Bitcoin doesn't have a way to censor your decision to move money from one address to another or even a protocol-level sense of whether you're buying Alpaca socks or a rocket launcher. (nb: You are almost certainly not buying a rocket launcher with Bitcoin; you are at best getting scammed, and at worst [getting in trouble](https://www.justice.gov/usao-cdca/pr/los-angeles-county-man-pleads-guilty-federal-charge-attempting-obtain-biological-toxin)). But this also means that the protocol can't tell when you meant to send your life savings to your cold wallet and sent it to the wrong address instead.

23+- The second downside is that a lack of ownership means that no one is responsible when things go wrong. Bitcoin doesn't have a way to censor your decision to move money from one address to another or even a protocol-level sense of whether you're buying Alpaca socks or a rocket launcher. (nb: You are almost certainly not buying a rocket launcher with Bitcoin; you are at best getting scammed, and at worst [getting in trouble](https://www.justice.gov/usao-cdca/pr/los-angeles-county-man-pleads-guilty-federal-charge-attempting-obtain-biological-toxin)). But this also means that the protocol can't tell when you meant to send your life savings to your cold wallet and sent it to the wrong address instead.

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25−The caveat is that, to quote a [Diff piece from last year](https://www.thediff.co/p/amazon-a-new-kind-of-antitrust-risk#:~:text=does%20it%2C%20too.-,Technology-Governance%20Fit,-Pondering%20Durian%20has) ($), "[A]ny decentralized order requires a centralized substrate, and the more decentralized the approach is the more important it is that you can count on the underlying system." This applies to cryptocurrencies (you can trust the protocols) and to the Internet (ditto). It also applies, in an interesting way, to the increasingly decentralized world of free trade and free-flowing capital: money can only flow and deals can only be made if everyone has a consistent sense of property rights and contracts, and the definition of those concepts will typically be determined by whichever participant in a transaction has the more sophisticated financial and legal system. Globalization ends up being a bit like Henry Ford's pitch: you can use any economic paradigm you want, as long as it's the American one.1

25+- The caveat is that, to quote a [Diff piece from last year](https://www.thediff.co/p/amazon-a-new-kind-of-antitrust-risk#:~:text=does%20it%2C%20too.-,Technology-Governance%20Fit,-Pondering%20Durian%20has) ($), "[A]ny decentralized order requires a centralized substrate, and the more decentralized the approach is the more important it is that you can count on the underlying system." This applies to cryptocurrencies (you can trust the protocols) and to the Internet (ditto). It also applies, in an interesting way, to the increasingly decentralized world of free trade and free-flowing capital: money can only flow and deals can only be made if everyone has a consistent sense of property rights and contracts, and the definition of those concepts will typically be determined by whichever participant in a transaction has the more sophisticated financial and legal system. Globalization ends up being a bit like Henry Ford's pitch: you can use any economic paradigm you want, as long as it's the American one.1

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27An open, decentralized system is sparse: there's room for anything, which means that most of the possibility space consists of nothing at all. This creates a natural demand for onramps—Coinbase for figuring out Bitcoin, portals for figuring out the Internet, TSM for turning chip designs into functioning products, and the like. These create a complicated dynamic: these onramps are built on an open system, but part of their function is to close off some of it. And the better they do that, the more value they can capture. Meanwhile, because they have a monopoly on what they've fenced off, their economics support providing a better user experience. Make a really helpful update to the Bitcoin wiki, and you can feel good about yourself and perhaps contribute to the price of Bitcoin in a highly indirect way; design and launch an improved onboarding process at Coinbase and your contribution is quantifiable, and affects your next cycle's equity grants.

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29This privatization proceeds in three different ways:

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31−Some companies start building on an open protocol and then slowly make it their own. Chrome's decision to make the search bar synonymous with the address bar was a slight improvement in the interface, but also a very strong statement that Google had replaced manually typing in URLs as the default way to navigate. (The strongest evidence for this is the frequency of navigational searches; [the most commonly-searched term on Google](https://www.mondovo.com/keywords/) is "Facebook" and [the most frequently searched term on Bing is "Google"](https://www.bloomberg.com/news/articles/2021-09-28/google-tells-judges-it-s-so-popular-it-s-bing-s-top-search-term).) Typing in URLs is a sometimes-decent way to find what you're looking for, though [the half-life of links is about two years](https://blog.zomdir.com/2017/10/the-half-life-of-link-is-two-year.html). But guessing at URLs can be [perilous](https://en.wikipedia.org/wiki/Whitehouse.com). No one is responsible for fixing this, but Google is the closest approximation, because what they are responsible for is solving the "look for something on the Internet and get the wrong result" problem, a different but related one from the broader task of allowing arbitrary site owners to host arbitrary content. Privatizing is effective, and solves problems for users rather than protocol designers. But it does go against the spirit of the original network.

31+- Some companies start building on an open protocol and then slowly make it their own. Chrome's decision to make the search bar synonymous with the address bar was a slight improvement in the interface, but also a very strong statement that Google had replaced manually typing in URLs as the default way to navigate. (The strongest evidence for this is the frequency of navigational searches; [the most commonly-searched term on Google](https://www.mondovo.com/keywords/) is "Facebook" and [the most frequently searched term on Bing is "Google"](https://www.bloomberg.com/news/articles/2021-09-28/google-tells-judges-it-s-so-popular-it-s-bing-s-top-search-term).) Typing in URLs is a sometimes-decent way to find what you're looking for, though [the half-life of links is about two years](https://blog.zomdir.com/2017/10/the-half-life-of-link-is-two-year.html). But guessing at URLs can be [perilous](https://en.wikipedia.org/wiki/Whitehouse.com). No one is responsible for fixing this, but Google is the closest approximation, because what they are responsible for is solving the "look for something on the Internet and get the wrong result" problem, a different but related one from the broader task of allowing arbitrary site owners to host arbitrary content. Privatizing is effective, and solves problems for users rather than protocol designers. But it does go against the spirit of the original network.

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33−Twitter is another example, except that they basically created their own open mostly-open protocol and then slowly took control of it. Tweets were originally a simple format, with 140 characters of text and a bit more metadata (this made it compatible with SMS, which had a 160-character limit). For a while, Twitter looked like it would operate a novel protocol and let third parties decide what to put on it and what to read off it. And then the company started to realize that an open system was also one where it was trivial to filter out ads and recommendations. So the outside partners gradually got cut off.

33+- Twitter is another example, except that they basically created their own open mostly-open protocol and then slowly took control of it. Tweets were originally a simple format, with 140 characters of text and a bit more metadata (this made it compatible with SMS, which had a 160-character limit). For a while, Twitter looked like it would operate a novel protocol and let third parties decide what to put on it and what to read off it. And then the company started to realize that an open system was also one where it was trivial to filter out ads and recommendations. So the outside partners gradually got cut off.

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35−Facebook—the product, not the company—is a third example. It essentially implemented a missing element to the protocol: identity matters. When the original protocols were being hammered out, identity was a problem taken care of by the fact that getting online required steep hurdles; if everyone involved is affiliated with a university that trusts them to use a PDP-10 responsibly, spam or abuse were not big concerns. (Not that early usage was [strictly professional](https://www.theguardian.com/science/2013/apr/19/online-high-net-drugs-deal).) With billions of people online, accessing relevant information can mean traversing a graph of people rather than links, so the identities of those people becomes important. To the user, if not to the network itself, a name and relationship is a far more important unique identifier than an IP address.

35+- Facebook—the product, not the company—is a third example. It essentially implemented a missing element to the protocol: identity matters. When the original protocols were being hammered out, identity was a problem taken care of by the fact that getting online required steep hurdles; if everyone involved is affiliated with a university that trusts them to use a PDP-10 responsibly, spam or abuse were not big concerns. (Not that early usage was [strictly professional](https://www.theguardian.com/science/2013/apr/19/online-high-net-drugs-deal).) With billions of people online, accessing relevant information can mean traversing a graph of people rather than links, so the identities of those people becomes important. To the user, if not to the network itself, a name and relationship is a far more important unique identifier than an IP address.

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37This pattern raises a question: is centralization just a natural tendency of all networks? Are we destined to have a "decentralization sandwich," where there's a hard-to-change set of protocols, something open built on top of that, and a series of closed systems built on top of that, which are the only ones the average person interacts with?

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51Norms are not a perfect solution to these problems (if they were, we'd only know about issues like novel addictive behaviors, monopolies, and the homogenization of entertainment from history books). And technology can't fully solve social problems. But it can certainly have an effect on them—"you can't solve a social problem with technology" is a good guideline, but technologies mitigate them all the time. What's a streetlight if not a technological solution to the social problem that there are places where it's dangerous to be out when it's dark? What's asymmetric-key cryptography if not a technological solution to the social problem that it's hard to keep secrets? There's still a fundamental tension with open systems, where they get mature enough to be useful at which point the median user's priority is getting things done rather than adhering to the network's original design principles. But a design that recognizes this from the beginning, and a community that wants to make it happen, can stave off decline for a long time. And that's the positive story of technology: we're all fighting against entropy, which is a hard fight to win, but there are long and fascinating stalemates ahead.

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53−(Disclosure: I'm long decentralization by way of Bitcoin and Urbit. If you're on Urbit and would like to discuss The Diff</em, go to ~lableg-tadrex/the-diff.)

53+(Disclosure: I'm long decentralization by way of Bitcoin and Urbit. If you're on Urbit and would like to discuss The Diff, go to ~lableg-tadrex/the-diff.)

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55−1. There is naturally some resistance to this, both because of conflicts with different countries' norms and with other countries' natural desire to determine their own destiny. So it's a leaky abstraction, but it gets less leaky over time as economies get more integrated and thus more of the world has to standardize. The most direct example of this is the fact that [the dollar's share of global invoices is 4.7x the US's share of global imports] (https://www.economist.com/schools-brief/2020/08/27/global-trades-dependence-on-dollars-lessens-its-benefits) ($, Economist). In the same way that English is most likely to be the shared second language of any two randomly-selected people who don't speak it as a first language, the dollar is most likely to be the second most useful currency to anyone in a country that doesn't use dollars.

55+1. There is naturally some resistance to this, both because of conflicts with different countries' norms and with other countries' natural desire to determine their own destiny. So it's a leaky abstraction, but it gets less leaky over time as economies get more integrated and thus more of the world has to standardize. The most direct example of this is the fact that [the dollar's share of global invoices is 4.7x the US's share of global imports](https://www.economist.com/schools-brief/2020/08/27/global-trades-dependence-on-dollars-lessens-its-benefits) ($, Economist). In the same way that English is most likely to be the shared second language of any two randomly-selected people who don't speak it as a first language, the dollar is most likely to be the second most useful currency to anyone in a country that doesn't use dollars.