Decentralization: A Matter of Computer Science, Not Evasion
Decentralization is an important concept in computer science that has gained significant attention in recent years. It is defined as a system or network with no single point of failure or "central orchestrator" that is required for proper operation. Decentralized systems require independent peers to collaborate to achieve some greater goal with aligned incentives. Most decentralized systems have no single entity or authority with the power or obligation to change or update data or transactions. For a blockchain network, the key point is that a distributed network of computers not centrally controlled must reach consensus about changes to “state + future transitions of state” (adding new blocks of transactions).
One of the primary virtues of decentralization lies in its ability to enhance fault tolerance and system resilience. In centralized systems, a single source of truth or point of failure can lead to negative consequences, such as when a hack or ‘fat finger error” occurs. Decentralized systems, on the other hand, distribute functions across multiple nodes, making them more capable of withstanding failures or attacks and not prone to errors. In the case of blockchains, they are robust because work is duplicated by everyone (taking away one or a group of nodes does not impact its continued functioning).
Furthermore, decentralization is a powerful tool against censorship and tyrannical control. In centralized systems, a single entity can wield disproportionate power to control or manipulate data or information flows. Decentralized systems distribute power among participants, making it much harder for any single entity to exert undue influence, control data, or censor (or alter) information.
When it comes to fault tolerance, centralized systems often rely on trusted third parties, which can be vulnerable to errors, security breaches or malicious activities. In decentralized systems, as illustrated in blockchain, we trust incentives to keep validators honest and the correctness of the software. The computer code is implemented and managed by a distributed network that reaches consensus. By eliminating the need for intermediaries, they reduce the potential for bad behavior and foster a more secure environment. As such, these distributed systems have the potential to scale more effectively than their centralized counterparts.
Decentralization also fosters a fertile ground for innovation and competition. It lowers barriers to entry, allowing a wider range of participants to contribute to the network and its associated ecosystem. This healthy competition can lead to the development of more diverse and specialized solutions, driving overall progress for the network and the applications built on it.
Contrary to some misconceptions, decentralization is not about evading laws or regulations. It is a network design element that seeks to ensure better information, greater user control and autonomy, and more access for builders. Dr. Emin Gün Sirer, founder of Ava Labs, put it this way in his testimony before the House Financial Services Committee:
Let me be clear: this ability to leverage distributed or decentralized networks is a desirable goal for many reasons that have nothing to do with securities laws, financial services regulation, or the laws and rules governing other areas of commerce, recreation, and communications. Distributed networks are more resilient, secure, auditable, and available for builders. Blockchain builders did not set out to develop the technology to evade laws and rules. We set out to solve computer science problems.
Decentralization is not about laws and regulations, but about unlocking the true potential of computer systems and associated technology. The internet itself is an example of a decentralized system: By distributing power, trust, and functions across a network of servers, it takes advantage of numerous benefits in terms of fault tolerance, censorship resistance, and scalability. Embracing decentralization in computer science is a strategic move towards building a more secure and inclusive Internet. Sensible, workable regulation in conjunction with innovation will help guide the transformative power of decentralization and blockchain to empower individuals and drive economic inclusion. The Tree of Web3 Wisdom is a set of principles to help guide blockchain regulation worldwide and harness the power of decentralized systems.
