InventionsNobody Cares About Decentralization – They Just Want to...

Nobody Cares About Decentralization – They Just Want to Get Rich

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In Clotaire Rapaille’s The Culture Code, he states that the American mindset is one that looks for something that “just works.” They are less concerned with perfection (figuratively or literally) than they are that the thing does what you want it to. They want a website to load on an app that works on a computer that turns on and loads and runs apps. To be clear, a lack of perfection doesn’t mean the thing is bad – it’s just the little touches on a product – or moral standards that said product allegedly adheres to – are less relevant than the thing working well.

This is something I can’t stop thinking about with decentralized everything. Putting aside the numerous problems of NFTs, or crypto in general, there is a huge problem that nobody is discussing: who cares about decentralization? What does decentralization do for the average person? What benefits does it give the user over another system? And, most importantly, does it work?

The problem with most of the decentralized apps you know (and all of the ones you don’t) is that, for the most part, they are incapable of doing the basic functions that are easy for other apps to do. Every action a user takes on the blockchain requires a signature, which in turn requires a currency of some sort to operate. These small actions are by default invisible when using centralized applications – the processing is handled in Amazon Web Services, for example, and when a user clicks something, they are ‘signing’ the transaction and approving it. To a regular person, there is no consideration of how many signatures you’re making through the process of using a regular app – but on every blockchain I’ve used, you have to sign everything.

For example, if you buy a token on a decentralized exchange, you must sign something saying that your wallet can talk to the exchange. Once you’ve done that, you must deposit funds – another transaction – and then choose to action a trade – another transaction. Want to alter the terms of a trade? Another transaction. Want to cancel it? Another transaction. Oh, good, you sold the token! That’s another transaction to withdraw the tokens to your wallet.

This alone should tell everybody why decentralization is not going to take on – it’s annoying, slow, and absolutely working as intended. When you choose to decentralize something, you remove the pleasant layers of centralization and standardization that reduce the friction of using the web. As my buddy Kasey told me, you are basically, instead of trusting digital signature services, choosing to trust the blockchain – which means you have to approve anything you want to do. It adds a blockchain layer to do a thing that the regular web could do already, but it’s slower and more annoying.

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I cannot express enough that this is intolerably clunky for most people, antithetical to efficiently doing anything, and requires a form of token to do everything. While your actions on a regular website – let’s take Substack, for example – do have costs, they are handled by the website’s service, not the end-user. The result is an oligarchal system that does a little bit of what the current web does in an awkward, ugly way.

53% of mobile users abandon sites that take three or more seconds to load, and the ideal time a website should load is about 2 seconds. While this isn’t like-for-like, what it suggests is that the average user would be intolerant of how much stuff you have to do and how slow it is to load. While you may say it’s “only two seconds” to load a page even on a fast blockchain, several transactions are likely to take far more time and require a particular download for new users, and even in the ideal scenario, take several minutes to use on a fundamental level.

The common refrain from crypto people is to point at all the things you can do on the blockchain, such as playing games, investing money, or buying a golf course. The answer is that the existence of something does not mean it is good at doing the thing it is trying to do. Just because the blockchain can have games on it does not mean it is good at having games on it or that we are a few technological breakthroughs from doing so.

Let’s forget what’s better on the blockchain for a second and ask…what’s the same? What product can you use on any blockchain that functions as well as it does on regular old web servers? Nothing? Nothing is even as good?

Wait, wait a second, though. That gets me thinking about web servers for a moment.

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Don’t all of these crypto companies have websites? Uh oh!

The Centralized Blockchain

Bloomberg’s Parmy Olson wrote a pretty good piece about web3 based on Signal founder and cryptographer Moxie Marlinspike’s extremely long evisceration of a core problem of decentralized blockchains – that they’re not decentralized at all and has big, nasty privacy problems.

The long (and man, it is long) and short of what he’s saying is even though these are “decentralized” products, they have to operate on the regular non-decentralized web:

For example, whether it’s running on mobile or the web, a dApp like Autonomous Art or First Derivative needs to interact with the blockchain somehow – in order to modify or render state (the collectively produced work of art, the edit history for it, the NFT derivatives, etc). That’s not really possible to do from the client, though, since the blockchain can’t live on your mobile device (or in your desktop browser realistically). So the only alternative is to interact with the blockchain via a node that’s running remotely on a server somewhere.

A server! But, as we know, people don’t want to run their own servers. As it happens, companies have emerged that sell API access to an ethereum node they run as a service, along with providing analytics, enhanced APIs they’ve built on top of the default ethereum APIs, and access to historical transactions. Which sounds… familiar. At this point, there are basically two companies. Almost all dApps use either Infura or Alchemy in order to interact with the blockchain. In fact, even when you connect a wallet like MetaMask to a dApp, and the dApp interacts with the blockchain via your wallet, MetaMask is just making calls to Infura!

Your big, beautiful decentralized blockchain is powered by layer upon layer of regular, centralized web infrastructure.

Olson, through Marlinspike’s words, aptly describes the problem:

A quick view on the mechanics and why this is so: Blockchain technology works by creating trust-distributing connections between servers, aka powerful computers, not between people with mobile phones like us. “People don’t want to run their own servers,” Marlinspike wrote. That is why companies have begun selling access to servers connected to the blockchain, becoming not unlike the companies that built the infrastructure of Web2. Ozone Networks Inc., the owner of OpenSea, is one company doing this, as are Infura Inc. and Alchemy Insights Inc. Many so-called distributed apps, or dApps, link to these firms to access the blockchain.

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So, to be clear, the only way to run a lot of these blockchain-based services in a way that works is to centralize them, which suggests that not only is decentralization, not something that works well for consumers, it also may not work for any of the blockchain apps that apparently will change the world.

The reason is that it’s very, very difficult to get lots of people to agree to something, and if they do agree to it, it may still be foolish:

While it’s technically possible to restructure the rules of blockchain to make it less reliant on a few firms, that would require getting the consensus of thousands of developers over the course of years. That is a big, human problem, not a technical one, which makes solving it look all the more unfeasible in the near future. The difficulty of tinkering with software and getting many other people to agree to changes is why one of the world’s most popular protocols, underpinning email, looks no different to how it did a decade ago.

The decentralized ecosystem that we’ve been talking about for years is a network of computers that can only really be accessed by using a very-much-centralized website.

Without quoting his whole article, Marlinspike makes an excellent point about the constant squalling of “but it’s early days!”

However, even if this is just the beginning (and it very well might be!), I’m not sure we should consider that any consolation. I think the opposite might be true; it seems like we should take notice that from the very beginning, these technologies immediately tended towards centralization through platforms in order for them to be realized, that this has ~zero negatively felt effect on the velocity of the ecosystem, and that most participants don’t even know or care it’s happening.

This might suggest that decentralization itself is not actually of immediate practical or pressing importance to the majority of people downstream, that the only amount of decentralization people want is the minimum amount required for something to exist, and that if not very consciously accounted for, these forces will push us further from rather than closer to the ideal outcome as the days become less early.

I would take his point further: I do not believe most people give a single shit about whether or not what they are using is decentralized. I do not think that the average person even thinks about apps or services in terms of centralization or decentralization, and at best, sees only the value of, perhaps, not being under the thumb of four or five big corporations. Even then, do they even care about that? Does it matter in any way, shape or form?

This is why I think so much of cryptocurrency and blockchain adoption is so firmly attached to investment and wealth. If you remove the idea that tokens of varying fungibility can grow exponentially, what is the value proposition of anything on the blockchain? Anonymity? Nope. Speed? In a vacuum, sure, but in a practical sense – in what you can actually do with said speed, nope. Safety? Lol. The only real idea left was the idea of personal liberty and ownership outside of legacy systems, which Marlinspike has accurately and painfully detailed isn’t the case.

That’s why crypto evangelism is so poisonous – because it’s ugly to say “join this system that I’m using so we can both get rich!” It’s much easier to promise dreams of escaping the 9 to 5 and evil “centralized platforms,” using vague dogma to convince people that this is a moral rather than fiscal crusade. The reason you might get rich is because you picked the right side. You are “going to make it” because you made the right moral choice.

It reminds me of another quote from Clotaire: that “at the unconscious level, Americans believe that good people succeed, that success is bestowed upon you by God. Your success demonstrates that God loves you.” Perhaps it’s not a universally American feeling, but crypto echoes a similar moralistic tone – that you are “going to make it” if you believe in the system, if you ward off or even actively attack critics, and if you are capable of bringing new people into the system.

This zealotry exists to protect the rotten core of the dream – that this is not a system that does anything that cannot be done better and in a more equitable way elsewhere, and it will likely only enrich those who were there early. By joining, you are just another sucker using a centralized service to view a decentralized service, buying into a system that is regularly and intentionally rigged in invisible and painful ways.

Sadly one cannot compare this to religious zealotry, because it’s so much closer to every single cult and scam you’ve heard of. While we may never know God’s plan – or, indeed, if there’s a God – but we can definitely see the crypto market’s plan happening right under our noses. People are happily manipulating the markets for profit, because the one thing that decentralization does do well is masking when and how large token holders decide to manipulate prices.

However, much like religious cults, the growth of blockchain and cryptocurrency can be tied directly to targeting the desperate. Instead of a cult leader, you have the group-based belief that all of you will reach the promised land if you simply keep spreading the gospel, which means blindly accepting any and all new projects in the ecosystem. And as you become further invested in the ecosystem and the industry itself, it becomes harder to leave, an escalation of commitment based on being too emotionally and fiscally invested.

This is why you see so many completely insane statements about NFTs and the blockchain – they are engaged in the delusional thinking of cultists, fooled in the same way, but with a far more tangible goal (being rich) that has happened to other people, and will happen to them too if they just believe hard enough.

They secretly crave judgment day, when the markets will “give to each person according to what he has done,” the great day when the chosen few will finally make it.

But what does making it mean? Does it mean being rich? Does it mean being right?

And if they finally reach that point when they’re both right and rich, does it matter that their decentralized, egalitarian, meritocratic system was always as centralized, rigged and oligarchal (if not more so) as the system they escaped?

Probably not.

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