Topic: Centralization vs. decentralization in society and the role of the blockchain (Read 313 times)

It is providing new benefits, but also new challenges. Torrent is an excellent example. Look at how easy it is to access music and movie databases. However, what's with the intellectual rights? I don't believe sharing should be forbidden, but a new way to compensate the artists must be made up. There are services like Bandcamp, iTunes, Netflix etc., but they are all, well, lacking...

Centralization always leads to abusing power, it's inevitable as it is bound to human nature which is burdened by greed (isn't the crypto world and a lot of things happening inside and around it an excellent example of human greed and vanity in action). A full decentralization and free market on the other hand inevitably lead back to the laws of nature - survival of the fittest, which is, again, not good, especially since in the human society the "survival of the fittest" usually means the "survival of the greediest".

Well, I can say decentralization is giving more benefits to the society. I can give an example such as a torrent technology. Until now, internet users still using this torrent technology. We can share anything files without boundaries.

Centralization tends to be abusing power. Using centralization, some individual could control many people live. I could give an example of a Facebook case, which selling our data. Facebook using our behavior and personal info to targeting ads https://www.recode.net/2018/4/11/17177842/facebook-advertising-ads-explained-mark-zuckerberg

Hampering actually means restricting movement. Decentralisation is also restricting movement because it is making decision making slower. However, there are ways to improve the decision-making process and I got what you wanted to say....this was just for the sake of the argument.

Decentralization is a better choice in society, too much of centralization hampers the system just taking the example of bitcoin only can tell as bitcoin is decentralized currency with lot of advantages. So I would prefer for decentralization over centralization.

About the article, I apologize, my mind was elsewhere obviously, I misunderstood you. I am glad you liked it.
Do you remember a name of that documentary, I would like to watch it?


Ugh, I totally disagree. Centralization would function if it offered accountability. Even a despotism would function in a good way if there was ever a totally moral, accountable and inerrable despot (there are obvious advantages in the process of fast decision making, but the required persons simply don't exist).  Politicians are a great example - they do lots of things for their benefit only, yet don't offer any accountability nor they bear any consequences for their actions (except for frauds, for which, if ever detected, they have to undergo a criminal prosecution).


Yes, but the Governments make the same mistake as we all do when we ignore the power of the critical mass. And this time maybe we have a possibility to forever alter the course of history by adopting the technology which "they" cannot control.


Those are the problems that need to be addressed and dealt with. Blockchain is still a young technology and there is a plenty of time to do that. As I am proclaiming through the whole thread - some kind of interventionism is necessary.

True. But the same is true with mainstream currency. Thus, we have banks that are "too big to fail" and "too big to jail". They are untouchable.
But most problems with bitcoin can be solved by science. The blockchain is growing and everyday few few hashing power can handle it. But there are still manufacturers out there, that are working to make hardware cheaper.

Lastly, bitcoin isnt even at mainstream adoption. Whatever problem we are facing now, there is still hope.
 

I think Bitcoin is less decentralised than mainstream currencies.

A small number of people hold a large % of coins.
A small number of pools control the hashing power.
A small number of manufacturers control ASIC manufacture.
A small number of exchanges control price (through bots and price fixing in my opinion)

Centralization is pushing power away from the hands of people and placing it in the hands of governments which has known to misuse them in one way or the other. While the focus is on a system which works independent of trust, not requiring any sort of third party intervention, countries would never approve of this as they would find it to be a loophole for tax evasion by converting assets into digital currencies which is hard to trace. With that being said, nobody ever has disapproved the use of blockchain technology which is like the tiara of creation which came along with Bitcoin, as banks and firms are making use of it today.

decentralization will promote more trust in transactions, which will improve many sectors. centralization offers accountability.

Thanks, I didn't know about a "liquid democracy" I checked it on Wikipedia.
I am confused, I am not sure what link article you're asking. I was referring to the link you posted https://futurism.com/sponsored-how-centralization-paralyzing-society/

I am not Swiss but I learned about Switzerland's system by watching a documentary about the economy there. I couldn't imagine such system is still possible lol. I was so surprised that I watched the documentary 3 times. The politic and economy is awesome there, it has surely some weakness but every country has some. When it's about foreign affairs policy and international relations the country is very smart.
If you notice you never hear about the country involved in shady practices, behaviors, etc... "Mind your business" works very well for this country lol

Yes, but searching for power means support centralization, not decentralization. It means that you are in this for the wrong reasons. I am searching for equality, not power.

It is fact that now everyone is in search of power so if power is the only thing then bitcoin is the best because it is now the most high and expensive currency. Not all people make this as an assumption and phenomena. If bitcoin will be use as a saving then it will rise again in price and value importance of bitcoin is main thing today, if high acceptance will be allotted in bitcoin then more people will trust bitcoin . Weakness that makes bitcoin low is the panic selling so if they will trust bitcoin and hold for the long time they will get profit.

Blockchain technology is the way to empower the people to bypass centralised financial and government institutions, leading the way to true sovereignty and freedom.Models of decentralised societies simply shifted power from one layer to another.

That is called "liquid democracy" and I am a strong supporter. During my short spell into politics (just wanted to make a difference) I was really advocating this system. The only problem is that in our country people are mainly criticizing everything so there is a danger that it would put a break on all progress. But I believe it would change if Government showed some good moves. Also, I don't see any harm in trying if the current system is not showing good results.

By the way, a little off-topic, I always admired Switzerland for being neutral and saying "screw you" to all that war-hunger human stupidities.

Would you mind sending me a link to the article, I wasn't able to find it?

Im not familiar with the process in Switzerland so i dont know how effective that is in practice. It sounds good though.
In other countries, i think that system is somewhat implemented through democracy. People vote for politicians who they think would be a good representative for their interests. But that system is flawed. It reality policies still reflect the best interest of the top powerful people. Trump's new taxation is evident to this.

A fair referundum might solve this. In such a way that each person's interest is equally represented. This might work in a rich country where the middle class is majority. If something like this is implemented in a poor country, extreme socialist laws might occur in favor of the poor majority. I know that sounds kind. In a perfect world, i want laws that favor them but the reality of the situation is money comes from the higher classes. If we implement policies that kill the high classes the whole system will collapse. There must be a balanced policies for both ends of the spectrum

In Switzerland, there is a government of course, but when they want to introduce a new law, regulation, etc, do you know what they do? A referendum and every citizen is welcome to give their vote on a particular proposal to say yes or no. They have a referendum on almost anything.
So a society without a "Power is in the hands of a few" is possible, but if the citizens don't really care then there is not much to do

BTW, I just finished to read the article on futurism.com posted in the OP, it's a very good article to read.

That is the society in which we currently live: Power is in the hands of a few and where the social structure is based on depositing trust in guarantor and centralized organisms, outside of them, is unthinkable. Politics, laws, FREEDOM, communications, TRUST, INTEGRITY, HONESTY, BUSINESS, production and distribution, at the speed of electrons, in the hands of the people, and not only of authorities. Centralization is inefficient, bureaucratic, and concentrates power in a minority elite. However, an analogous society was required for our evolution, but it is no longer necessary in the digital world where cleverly used technology returns power to people, and generates trust and cohesion in a more agile and effective way.

Society 3.0 does not need oppressive entities that limit its action, by itself it regulates itself and discards what does not allow its development. This is blockchain.

The Blockchain, which I basically call the Operating System of the Society (as well as Windows, Mac OS, Linux, Unix were for computers, and Internet was for access to information and communications), will play a role of construction of new processes and institutions, based on a "decentralization" format, without "private ownership of things".

The Blockchain, what it does, is to ensure trust between two people. Without intermediaries to guarantee it (call it institutions, companies or any other type of centralized association). That is, it will not only transform the Economy and Finance sector, or the "Businesses"; but it will forever change the way we organize ourselves as a Society.

I think we have a little bit of a clish-clash on economic terms. The economic phenomenon is a proven & observed phenomenon that is based on years of a research in real life situations. The phenomenon of supply and its behaviour is a fantastic example. The name "phenomenon" or "phenomena" is derived from the fact that it is not simple mathematics but is strongly relying on the behaviour of the society.

What you are referring to may be the economic theory, or economic intervention, in any case - a trial to use economic phenomenon as part of the strategy, and yes - mostly they don't happen as they are supposed to happen, that is why we had so many failed system over the years, and yes - one of them is capitalism.

Who will win at the end may  come to an simple and seemingly naive question - are there more good or more bad (and "grey") people in the world. I would say there are more good, I've always been an optimist. At some point in the future, a critical mass of good will simply overrun the bad.

Yes, there are such thing as true in phenomena but most of it are not what really happens to our economy. I say it is all assumptions because it can be revised or modified by the new theories. That's why it is call as phenomena, there are certain times that it happens but not at all.
I agreed to you that greediness of the power is the real problem of our economy. The improper distribution of goods and services for the people are the main problems of our society. Every economic model as its own weaknesses and we just need to acquire each of it in order for us to survive.

I would not say that economic phenomena are all assumptions. For example. The phenomenon of demand and supply. They are really powerful and explain how the things happen in the real world.
The economic model is a sum of different phenomena and as you noted there is not "the best one". Each of the old models can be applied to a different society and wouldn't necessarily work on the other. However we can study why something worked out and something did not and based on that make new economic models, always having in mind what the current society needs.

The power of the greedy is what the problem is in every system. They will always find a way to make things their way. Hence I made an argument that blockchain and smart contracts can help stop it from happening with some in-built interventionism.

I dare say that you cannot make "a dangerous" economic assumption. Because even if you don't understand something, you are still making an argument and the worst that can happen is that you can be proved wrong.  You can only make "a dangerous" assumption for someone who doesn't want "a word to spread".....

Your conclusion is great. I've never put it that way although that is more or less what I've been saying.


Well, although individuals are indeed rational, I do believe that you can kind of predict the movements of the masses, hence making a prediction model is not such an SF. Have you ever red "Foundation" seriers by Isaac Asimov? Although it is a pure SF, it does have some valid presumptions.

There is also a very current economic debate ongoing which is arguing that you shouldn't use old study cases to evaluate the potential future trends since every society is organic and there is much that is changing over time - society standpoints, economic instruments etc. etc. That being despite politics and media forcing the same things all over again (as you noted in your next comment).



Very good buwaytress, it is indeed true, we can already see that hybrid approach in practice all around the world. Haven't the Japanese already showed us the power of hybrid thinking by becoming the second strongest economic force in the world in a relatively short period of time just by using it?

True. I see socialism and capitalism as a spectrum. Extreme Capitalism widens the gap of the upper and lower classes while extreme socialism leads to stagnation of innovation. You really need both.

Economic phenomena is assumptions, it never really happened the way it happens in this world. Yet it is more similar than what we are experiencing, we don't deny that some view point of it is different from reality.
There are different economic models that describes how beautiful a country looks like when it follows. But the real is, there is no such thing as best economic model. All of it has its disadvantages and people specially the government and private organizations take advantage in economic system.
There is no dynamical system that takes place in our economy, most of it are just for a conspiracies to improve theirselves. We never functions as one, people never united because we have our own perception.
In conclusion, The wealthier person benefits all of the sacrifices of poor people and even there is communism that tackles the equal allocation for the people, the end of it will goes in the pocket of administrations. Remember, there is no equality in this world, rights are nullified by power!

That's probably a criticism most long-time students of social and economic science will acknowledge to some extent! They do not yet embark on "serious case studies" using the same lenghty rigours of their more hard science counterparts. Another shortfall of all economists is their predilection for the old, existing economic models which simply do not lead us to correct results because of the mistaken basis of rational theories... and we keep learning the lesson that humans are anything but rational.


Yeah... it's 2018 but my government, for example, still considers socialism taboo, we still run state-made documentaries on TV about how dangerous it can be (generously, erroneously plastering the communist label of course). Then again the same documentaries feature a collection of burning portraits of Marx, Attaturk and Darwin, so I guess no one buys the message!



Like dado says, there is no black and white, and hybrid or mixed concepts are what is practical and in fact already in use all over the world. We can see outwardly capitalist regimes with strong socialist desires at heart (I point at West Europe and how since mid-200s all have come to embrace universal healthcare, for example). On the other side of the world, we see staunchly socialist goverments practise all out capitalism. One mention of China and everyone in the Speculation thread wrings their hands.

I dont have much background in economy so forgive me if im making dangerous assumptions. I dont think intervention should come as something that would force people to abandon a system to adopt a new. I think intervention should come as policies that would excite competition. Because competition would naturally make people adopt a better system. For instance in the present, we dont want to make people abandon the current traditional banking model, let them realize its shortcomings then maybe they;ll switch to cryptos.

As for socialism and capitalism-- I do like the idea of socialism but no one has ever successfully implemented it. I dont think it will work in the real world because it doesn't give much incentive to innovate, unlike capitalism. But then again, capitalism is the source of centralized power and the uneven distribution of wealth. It's a system where the poor keeps getting poorer and the rich keeps getting richer. I do agree with you, a hybrid model is very much needed. We need capitalism to keep pushing the boundaries of innovation and socialism to give  the less fortunate equal opportunities to be a competitor.

Yes, economists. You know what the problem is with economists? I studied economy, and it probably isn't the same in every country, but we learned a lot about the common economic phenomenon (inflation, primary emission, money, supply, demand,.... you name it) and what they can provoke. But we never did any serious case studies. We never learned a true picture of how those phenomena all work together in an organic society. I believe that a bachelor of economy should be able to predict an output model based on some input parameters, but guess what - we are not able to do that. Also, there are quite a few things they won't tell you, and also - you learn mostly about old ideas, nothing about new ones, so when you finish your study, you are already a couple of steps behind.

I like how you noticed this non-centralistic interventionism (oh my gosh, what an oxymoron, but I think it is indeed true) as something new. Yes, blockchain, liquid democracy, equal money, basic income - those are all instruments towards the better future.

All of us that want a better world have leanings toward socialist tendencies. It's pity that humans spoilt the term socialism for everyone as it is nowadays mostly seen in a negative light. I am not against capitalism neither. It was Bill Gates that said - capitalism is a great thing because without it he would never be able to start from the garage and become a billionaire. We need a hybrid, much like Keynes proposed, but the Keynes based his idea on old economic theories and we need new ones.

I won't pretend to understand much of the deeper academic disciplines (even if am familiar with at least Keynes) but I guess this is the reason why some economists can't see blockchain as a mere disruptive tech but a foundational one, a building block (no pun intended) upon which emerging industries will establish themselves. Bitcoin was very ideological, but perhaps deliberately left out certain economic aspects of serious consideration. But I think decentralisation allows or in fact encourages diverse reactions to the free market - so even intervention and attempts to influence is a natural product of that, simply that anyone is free to do so and none represent a central authority. We can see this happening within Bitcoin itself, even though it is barely ten years old. We've got people like the Bitcoin Foundation advocating their views, we've got the Global Blockchain Council exerting their influence right now even within the EU parliament, we had the miners backing the NYA last year, and eventually abandoing it. All are interventions, but none of these actually representing a still very much decentralised network.

P.S. I'd guess I have a leaning towards socialist tendencies. Like Keynes, I think the survival of the fittest cannot be applied to our society because that simplistic nature does not extend to intelligent species, even if it governs basic sentience.

Hm, yes, you are indeed right. However, I have to say that by my economic beliefs I am, besides being rather eclectic, more prone to support the theories of John Maynard Keynes then those of Milton Friedman.

If you are not familiar with those guys, the main difference is that Keynes is supporting the interventionism (by governments that is), while Friedman is supporting non-interventionism - laissez-faire, or self-regulating economy.

While I believe that full interventionism is not sustainable (fast decision making is the best thing about it, but the human nature is the worst), I also believe that self-regulating economy is not sustainable either. Slight interventions are always needed. That is what Keynes was arguing about too. It's just that the supply-demand rule solely cannot be beneficial for the whole society (it is like letting everything to nature - but is the nature really fair with it's "the strongest survive" policy? Maybe it is, I don't know, I don't have the capability to understand such things) - technically the idea behind free market is de-centralisation, but the survival of the fittest will always lean everything towards centralism. Also, those greedy on power will always find a way to influence things on some level. Hence the interventionism of some sort is needed.

However, that is how the society works nowadays. Blockchain with smart contracts can help the idea of laissez-faire really live, it can help the market and society to self-regulate and become fairer. I do believe that some kind of "interventionism" has to be built in the technology though. Adams Smith's "invisible hand" could be redefined just a little for the benefit of us all.

I think Bitcoin's decentralisation is still true; the power of decision making does not lie in the hands of the few, the oldest adopter and today's newest user still has equal, full control over what happens with their funds, still has equal access to the network. How it develops and progresses is still a matter of consensus. I would say this is a rather different thing from the geographical concentration of users or the concentration of wealth among a relative few - that problem should solve over time, at least speaking about Bitcoin itself.

If you're suggesting intervention in the sense of creating strict rules about how people should be limited in how they keep their funds, then surely that itself is an erosion of decentralization? In this respect, I think we've seen plenty of altcoin projects purport to "redress" the problems perceived with Bitcoin, hence the so-called third-generation blockchain projects, hence the multiple forks of Bitcoin. Most are thinly-veiled attempts at creating new wealth, but I think some are genuinely motivated to continue building on the ideals of decentralised money.

Yes, I mentioned that "the whales" are a problem. On how to solve this problem - well, this board is open for discussions. I was never against private property, people getting rich because of their capabilities etc. I just don't see a decentralization working when it's beating its purpose. Maybe a new token/coin should be created with strict rules about this, incorporated in the technology. Maybe not a new thing, maybe a fork? Maybe it can work as it is as well?


Oh yes, and the first problem is the human nature. You cannot beat it. You can just work with the available tools to try to decrease its effect on the social welfare. The blockchain is just one of the tools. It cannot solve the problem with world centralization by itself - no.

When bitcoin is claimed as great decentralization tool and technology which is not compatible with word "centralization", we can't say it is decentralized in real world. Amount of top wallets with over 50% coins, huge rate of wallets located in one country sounds like great reasons. Blockchain as technology should more aggressively meet the challenges of a real world to have significant impact on society decentralization level.

Bitcoin is just a small part of this, the true disruptive technology here is the blockchain. However, i dont think blockchain alone will end centralization. There are still problems we must address. The most obvious one is the scalability and centralization trade-off .  the BTC system is very decentralized but the trade off is its scalability. For applications such as medical records, how do we make sure the records even make it to the chain? Assuming every hospital is using it. Another problem is that maybe in the future, the blockchain will be so large, only a few chosen institutions will have the means to maintain it. If that happens they'll be like one of your political parties in your country, just another "decentralization used as an instrument for harder centralization."

Centralisation really does have a mass effect on our society today especially now that many companies and banks are adapting to this kind of system because it makes the company keep intact meaning they are aligned to one method and procedures to help the keeping the companies meeting it's objective intact and to easily monitor on what is going on in their working environment and allow the government have a view on their activity and information. While on the decentralize system it promotes motivation to the people because they are given the privacy and method to act as their own to test which bring out the best.

Ever since Shawn Fanning and Sean Parker had swept away the world with their service Napster, popularising the peer-to-peer (P2P) file sharing protocol, they showed us the true power of decentralization. They caught the music industry totally unprepared (luckily for the movie industry, they had more time to prepare as the most of home internet connections at those days were not broadband and not fast enough for easy downloading of movies) and it suffered huge losses.

The big downside of this was that many artists and those rare non-greedy managers suffered along the big players too. However, if better prepared, they could have utilized this technology for their own benefit. Also, the artists could have found a formula to better realize their talent and hard work. Who could have known though, right?

This phenomenon showed a way for more future decentralized technologies and one of them is blockchain. The idea of blockchain came from a totally different story. Many people were growing dissatisfied with the current financial system, the way money is created, controlled, and also allocated.

We know that creation is a problem - if there is only a bunch of people that can control the supply of money - it can be misused in many ways. Doing business with the likes of credit rating agencies they can create opportunities for no one else them themselves, even in the form national crisis.

The allocation is also a problem. It's not just that fiscal politics are unfortunately mainly used just as tools for political bargain and marketing, but the fact that the allocation doesn't work very well with human nature in general. A good example would be hunger in Africa. It's not just that the world currently has enough food to feed everybody, it is also that those countries with the image of being poor are having it too (it's only being very poorly distributed). Robin Hood cannot always save the day.

Blockchain utilises a ledger technology to offer something similar to a peer-to-peer protocol, in a way that there is no central node needed for the communication of the clients/peers. It is a pure decentralization in the technological sense. In the commercial sense - yeah, whales are the problem.

I found this great text about how blockchain can benefit  various niches of society through decentralization and not just through a new way of distributing money https://futurism.com/sponsored-how-centralization-paralyzing-society/.

The main role in this transformation should be played by the system of smart contracts. This self-regulatory system offers a way to avoid human error in judgment, and by that, I primarily mean bribery and corruption. It also offers a way to avoid the need for the middleman.

Does anybody remember a legendary movie Metropolis, made by Fritz Lang, which tried to explain to us why the middleman is important? In that sense - a middleman from this movie was an economist, a manager functioning as a bridge between the working class and the government, and we could have considered them being really needed. But the manager can get greedy, and anyone else in that chain can get greedy too. Hence the elimination of the middleman and strict but honest rules for the end parties can make up a much better system.  An artist could get a greater share for his work, a person buying his first real estate could get a job done without a dozen of agents functioning as intermediaries, with the constant fear of what if some of them are corrupted etc. etc.

Talking about politics, it is also interesting to note how they like to sell centralization as decentralization. Remember communism? The idea was not bad, but the problem was that all the decisions were made centrally and everything, starting from money, was collected centrally. Hence the idea was ruined by the mechanism in the process - it beat its purpose.

Do you know how the voting system in your country works like? I can tell you how it works in mine. You have (too many) autonomous districts. They call it a decentralization. Imagine yourself founding a new political party. In order for someone to be able to vote for you, you would have to register a bunch of people and have them active in each of this autonomous districts, otherwise, people from districts you left out wouldn't be able to vote for you. You literally have to have a small army. Those are the rules. There are only two political parties in the country who have enough money and support to pull this off. They call it a decentralization. But it is actually a decentralization used as an instrument for harder centralization.

This is making changes nearly impossible, or at least very slow. Thus centralization is indeed paralyzing the society.

This topic is open for discussions.