The Satoshi Revolution: A Revolution of Rising Expectations
Section 3: Decentralization
Chapter 7, Part 2. Here, there is no State.
The core innovation of cryptocurrency is decentralization—the diffusion of functions or power across a broad network. The decentralization of crypto is what yanked financial control away from concentrated authorities, like central banks, and into the hands of individuals.
Yet some people argue that decentralization does not exist in crypto. The argument comes from a tension between the original vision of Bitcoin and the hundreds of cryptocurrencies, the hundreds of communities that have arisen. On one hand, currencies like Bitcoin have no coordinated authority, no central management, and there is no one point at which they can fail. On the other hand, many vehicles of crypto are businesses run by a small number of people in a specific location, which bow to government dictates. In short, the technology is decentralized but many expressions of it are not. Adding to the confusion: some of the most prominent actors are centralized exchanges, like Coinbase, that resemble nothing so much as regular financial institutions in their reporting requirements and other demands. They are the type of institution that crypto was designed to avoid.
Which is true of crypto?–is it decentralized, a new form of centralized fiat and banking, or a hybrid?
The answer is “yes.” Cryptocurrencies are dividing into two broad camps, which are politically antagonistic. Things are centralizing in the sense that “mom-and-pop” shops for crypto are less frquent; corporations and government involvement are more common. The dividing line between the two camps is whether the centralization is government-mandated or the free-market variety. The first is coercive and the death of crypto as a freedom tool. The second is voluntary, and it is usually a matter of nothing but
