So you want to be an Decentralized platform? - Part 1

Recently many new companies (platforms/systems) adopt the title of decentralization, however before we proceed to name one as such we need to investigate the different aspects that can be decentralized.

These can be:

  • Political - Who controls the system/platform is built on. From infrastructure to rules.
  • Logical - By splitting the pool of service providers and users can the system still operate?
  • Data - Where are the data stored?

This topic will be split into 3 different parts one for each aspect.
In this post I will discuss the aspect of Policy and we will assume that the other 2 aspects are decentralized.

Governance 👩‍⚖️👨‍⚖️

Most systems/platforms have a set of rules that are defined by the owner of the business and are enforced through a set of procedures mainly written in code.

To examine the political aspect of a decentralized platform we will use Reddit.


Reddit has a good grasp on that and although it was never mentioned as "Decentralized", the political part at least is.

In Reddit all subreddits are governed by the communities themselves and the moderators. Some may argue that some of those sub-cultures/communities are governed by an oligarchy as the moderators cut and sew posts and comments as they see fit but we will go with the notion that they are good people that will not abuse their power.

Yes this can be regarded as a slight hint towards the oligarchy of subreddit groups.

Ofcourse reddit has set a generic set of rules that need to apply regardless of the opinion of the moderators/communities to ensure the smooth operation of the system.
Banning IPs or accounts due to excessive spamming or malicious intent are some of them.

And all is nice and peachy 🍑 but how can this go wrong?

Reddit has never been a decentralazied platform and thus it is no longer a good use case example.

Let's take a look at blockchains.

Block-chain ⛓️

Blockchains are by definition decentralized, or that is what the concept dictates.
This might be controversial to some, but not all blockchain implementations are.
We have private blockchains that are by definition private and thus governed by the owners although this is their right as they are private.

However there are implementations that dictate the operation of the chain. That dictate the adoption of features, upgrades, flow.

Who should be the decision maker in this case?

In a system used and heavily run by decentralization and it's users, consensus should not be applied only to the fulfillment of transactions but also to the system itself.

A true decentralized system gives the governance to the users, allows them to decide not just split the effort.

If there is even one mechanism built in by the governor system that forces the users to a certain path, or can alter the direction that is taken by the users it is not decentralized, it takes a more distributed approach.

Imagine buying a software from company XYZ. Two days later the company stops support for MacOS even though they had mentioned there will be full support for 1-2 years minimum. In the current state the law could probably help you with getting your payment back, which is debate-able depending in which country you reside.

In the example of Ethereum change EIPs-867 the community was split in terms of which approach is best. But regardless of the result some will like it and some will not.

What happens next?

In most similar cases a "fork" is created resulting in 2 different lines originating from the same source.


In theory this is fair as you have a choice to choose either or and it shows itself as quite democratic approach.

But was it really democratic?

Although Ethereum has a better coin owner distribution than let's say bitcoin, it is still highly dense in the top 100 source.
This is the exact same flaw that any "governance" system has had over the centuries.

The few people who own more than the rest will have higher weight in the decision making.

Or what happens when you can fit most of the mining processing power in one picture?
I know this is for bitcoin however most major blockchains have the same issue asia miners

Summing up.

When a selected few either because they are part of the software team, or own the biggest % of coins or own the majority of mining power can influence the course of the software we are no longer talking about decentralization. The governance is an oligarchy.