Is Centralisation Inevitable ?

In crypto, we are told that decentralisation is the ideal, and that centralisation is dangerous because it can give control to the wrong people.

However the reality is that if you look at history and anthropology, humans appear to naturally centralise, and to want to do so.

Image by Aristal Branson from Pixabay

The Anthropological Perspective

There seems to be a popular mental image of early hominids wandering the African savannah in an idyllic state of small family groups hunting and gathering.

The reality is that evolution is a competitive sport, and second prize is extinction. Early humans had to compete with other species for resources, and were themselves a resource that apex predators (especially leopards) preyed upon.

The winners in this game were the ones which were able to balance resources and population size. We see this now in our closest relatives, the chimpanzees. Successful groups are those with strong leaders, but if a leader is weak or the group is so successful it expands beyond the resources available it will fragment and conflict may result.

The "Gombe War" from 1974-78 is a good example. It's not the starving groups on the edge of survival that start wars, it's the ones successful enough to have a strong population base and strong leadership. In other words, centralised groups.

The Historical Perspective

Throughout human history, we see a tendency towards centralisation.

When the agricultural revolution began in the Neolithic and towns were founded, the creation of a leadership caste came with it. Agricultural surpluses enabled increasing specialisation. Not everyone needed to farm, some could be potters, weavers, or whatever. The surpluses and increasing variety of roles also led to the creation of classes responsible for organising everyone else; centralised leaders.

It didn't take long for those leaders, often initially religious in nature, to become war leaders. They were responsible for defending the town against outsiders wanting to take their resources, and taking the resources of their neighbours.

This led to the creation of city-states, then kingdoms, and finally empires.

When we read history, it is almost always focused on the exploits of key leaders. Alexander, Caesar, Shi Huangdi, Alfred the Great, Napoleon etc are the focus of the great events we read about. In almost every case, their role is to increase the centralisation of society, and the majority of their populations were happy about it.

Even now, when "democracy" is touted as the ideal form of government (at least, that's what the Americans would have us believe), the reality is that we look up to strong centralising leaders. Weak leaders are regarded as failures and strong leaders might be feared or hated, but are respected.

How Does This Impact Crypto ?

Within the crypto space, I see two strong centralising tendencies.

The first is the desire of the existing centralised (and increasingly authoritarian) power structures to capture it and centralise it through regulation and access control. Bitcoin is a good example; it's becoming increasingly heavily regulated, and more and more BTC are being bought up by legacy financial institutions like Blackrock. How long before the percentage in the hands of small investors is so insignificant as to be irrelevant ?

The second is more subtle. Most crypto projects have at their heart a single leader or small group who set the rules and drive adoption. Even if they don't have enough of a governance token to give absolute control, they wield enough influence over users and (more importantly) developers and governing foundations that they can usually determine what happens.

Even a project as notionally decentralised as Hive in reality has a core group of probably no more than 30 or 40 people - witnesses and whales (often the same thing) who effectively exercise control.

So What's The Answer ?

This is a purely personal opinion, but I think we have to live with centralisation. It is core to human nature, and it is the vision and drive of individual leaders that enables humanity (and the crypto sphere) as a whole to get things done.

But... and it's a big but.... there need to be checks and balances.

The ideal form of leadership and government is (in my opinion) a benevolent autocracy where the leader knows they can't push it too far and is enabled to listen to "the voice on the street".

In order to keep popular support an autocrat needs to know they'll be held accountable (preferably at a point before lamp posts and ropes are required...). Their role should be to create a foundation of rules that are visibly seen to be reasonable, proportionate and fair, and then to step back so that people can live their lives without being micromanaged.

In the world at large, I don't believe this is the case. More and more we are ruled by an elite whose motives appear far from benevolent and which wants to control every aspect of our lives.

Crypto is, I believe, in a much healthier place.

There are a few projects (Algorand, for example) where the centralising tendency has become badly authoritarian. But generally, I think we're doing pretty well.

Nakamoto set up a firm set of fixed rules with a clear benevolent agenda and then disappeared so we could get on with using Bitcoin within those rules.

Vitalik Buterin is far more visible and has a strong influence over the direction of Ethereum, but is generally perceived as a benevolent influence.

Even within Hive, InLeo has #khaleelkazi very much driving the project forward and working hard to get to an end goal where we will all benefit.

So I believe that we have to accept that centralisation is inevitable, but should all work hard to ensure it is delivered for benevolent reasons and (most importantly) with a light touch.

Posted Using InLeo Alpha