The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2 : The Moral Imperative of Privacy
Chapter 7: Decentralization
Decentralization (Chapter 7, Part 1)
A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.
–Satoshi Nakamoto
(Note: This article consciously side-steps the question of how decentralized various cryptocurrencies, such as bitcoin and ether, truly are. It assumes as a given that crypto is a paradise of decentralization compared to the central banking system.)
In 2009, Satoshi Nakamoto offered the first digital, decentralized currency that was based on algorithms rather than trust. The decentralization is key. No one person controls the operation of bitcoin; everyone can participate on an equal peer-to-peer basis. The system uses a distributed network of nodes to verify transactions that are publicly visible in an open ledger. It was something new under the sun.
The “non-trust-based system” that Satoshi described has obvious advantages. For one, people do not get screwed over by unscrupulous third parties, such as lawyers, former spouses, or banks. But the advantages of decentralization are less obvious. Centralization can be a purely practical matter, and it can be a good strategy. A business, for example, may be more efficient and profitable if decision making is controlled by one person. There is nothing intrinsically wrong with centralization. Except….
In the political sense. Centralization is disastrous to freedom because it strips choice from individuals and converts personal rights into decisions made by committees. Another term for centralized control is “social engineering.”
Through most of history,
