The future of decentralization
Blockchain, cryptocurrencies, and decentralization have dominated discussion in tech circles throughout the early part of 2018, and yet very few people understand the impact those technologies could have in the coming years. At the Blockstack Berlin conference earlier this month, we asked seven experts what they thought were the greatest challenges and opportunities facing the blockchain industry today.
When it comes to decentralization, we wanted to know: What is it, why does it matter, and how do we not screw it up?
What is it?
Decentralization is a new way of organizing information that has the potential for fundamentally restructuring not just how information is stored and accessed, but also could create a new basis of trust and identity.
“What comes after the industrial age? I call it the knowledge age,” Union Square Ventures managing partner Albert Wenger told us. “Decentralized systems are a technological capability that enable us to create that age.”
That means coming up with a whole new infrastructure, according to Blockstack’s Muneeb Ali, who compared the work he and others are doing to the development of the protocols that have come to define the early Internet.
“We’re not trying to build a company, but an entire ecosystem. We’re at a stage where no one has built ecosystems like this before,” he said. “Examples are open source protocols like TCP/IP, but there are no recent examples.”
While it’s still early days, the technology has the potential to give users what Filecoin founder Juan Benet calls “proper digital self-sovereignty.” That’s in contrast to the centralized systems that rule the Internet and hold user data today, which Benet says is “really problematic for a bunch of reasons.”
Why does it matter?
In many ways, the emergence of decentralization will give technologists a second chance at constructing Internet applications. According to Blockstack co-founder Ryan Shea, “In the early stages of the Internet they didn’t build security and identity into the internet. So companies went in and plugged the gaps and gained a lot of influence. This time we want to think ahead of time.”
Democracy.Earth’s Santiago Siri agrees that these new technologies could be just as influential as the introduction of the Web decades ago, but cautions that against too much early enthusiasm.
“When the Web started it had the same optimism as the bitcoin revolution. That optimism fueled the early industrialization of these technologies and the fever of the dot-com era,” Siri said. But he adds that 25 years later, “we ended up with a World Wide Web dominated by two companies… The dream of the web gave us this Orwellian nightmare.”
For USV’s Wenger, just because decentralization is a new way of doing things doesn’t necessarily mean it will be better. He warns that decentralization “makes very good things possible, but also bad things. So just because it’s decentralized doesn’t mean it’s good.”
How do we not screw it up?
So how do we avoid the same pitfalls of the past? Parity co-founder and CEO Jutta Steiner argues that ultimately it’s up to us: “Whether this will become a utopia or dystopia will depend on regulation. It’s up to society how to deal with it, and make sure that the good stuff will prevail,” she said.
Meanwhile, Wenger remains optimistic that we can come up with the right regulations. “I always think of the car. The reason why it got successful is not because government had the right regulations for it, but eventually we got the right rules of the road. The same is true here. We need the right form of regulation.
“There are two dangers in the future that I dream about,” Wenger continued. “The first is that we never find the use case. There are great solutions that are looking for a problem. My second fear is that in the adoption of decentralized systems, the message is portrayed as taking away power from governments or brands… I very much believe that they can continue to exist and sell amazing services and sell trust as well.”
Watch more from each of these experts on our Blockstack Berlin YouTube playlist or jump directly to the videos below: