Is Decentralization a Failed Faith?

How ridiculous. When I was diligently spreading liberal ideas, nobody paid any attention to the philosophy of decentralization. But once it appeared alongside Bitcoin, everyone suddenly started waving the banner of decentralization and selling philosophy. In fact, I even question whether such a grand term as decentralization is necessary. A life in which an individual exercises rights over his own life and becomes the decision-maker for it—that is what liberals have been arguing for fully 200 years. What is truly interesting is that, as these ideas were reignited with the emergence of blockchain, people in the industry began interpreting decentralization in all sorts of ways. There was even public opinion criticizing the philosophy itself. The claim was that decentralization had failed, that it was inefficient, and that this was why blockchain technology had struggled to gain mass adoption. Today, I’d like to talk about that.

The View That Decentralization or Devolution Is Inefficient

Of course, there are plenty of arguments supporting this view. Looking at political systems, some would say that the most efficient form of governance was Hitler’s fascism, and that South Korea’s infrastructure was built because the dictator Park Chung Hee wielded absolute power. Of course, both Hitler and Park Chung Hee left serious aftereffects, but it cannot be denied that under their rule things moved swiftly. That is because there was a single decision-maker. But now imagine that decision-maker becoming 100 people, 1,000 people, or 10,000 people. Even couples fight bitterly because they think differently, so if every member of a system were to participate in making decisions for that system, how much friction would there be?

But from the start, it seems that the term decentralization became significantly distorted once it entered the blockchain field. Does decentralization necessarily mean that I must become the decision-maker in every area? Absolutely not. To begin with, it is absurd to think that human beings could survive in such a system. In fact, such a system has never existed in human history.

I think this is also where the blockchain field’s refrain of “run a node” comes from. Is running a node the only way to achieve perfect decentralization? Absolutely not. The problem is that decentralization was defined in such a strange way that it turned into all kinds of inefficient and absurd idealistic nonsense.

What Decentralization Is

Then what, exactly, is decentralization? A liberal would probably answer this better than anyone else. A voluntary, spontaneous system—that is true decentralization. True decentralization does not mean that everyone must be a node. It means creating an environment in which anyone can become a node whenever they want. The market is truly decentralized. Take the automobile market, for example. It is highly decentralized. But does that mean I need to understand the parts that go into a car? Even without understanding what parts are in a car or what technology was used to make it, I can drive a car just fine. But anyone who wants to can become an expert on cars. If I use products made by Samsung Electronics, does that mean I need to understand every manufacturing process behind all the products Samsung Electronics makes? Absolutely not.

Decentralization Actually Makes Things More Efficient

When decentralization, or devolution, takes place, things can actually become more efficient. That is because each person can maximize his own efficiency in the area best suited to his talents. History proves this as well. When ordinary people were given more authority and allowed to display their abilities freely in the fields they wanted, humanity achieved rapid growth. When Hayek met Deng Xiaoping and Deng asked how China’s economy could be developed, Hayek advised him to let farmers own land. That advice pierced straight to the essence of the issue. Not everyone can be a decision-maker in every field. Each person has his own area of expertise, and an ecosystem of exchange in which these areas are traded—didn’t Mises call this catallaxy?—is true decentralization, and it has been one of the greatest drivers of human prosperity.

Can anyone still say that decentralization is inefficient?

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Original title: 탈 중앙화는 실패한 신인가?

Author: Nam-ung Kim

Date: 2019-10-16

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=free_opinion&pn=17&idx=21969