Cryptocurrencies and Decentralization
Despite the fervour and hype, cryptocurrencies face a very steep uphill battle.
Decentralization is the most important benefit of cryptocurrency. Decentralization is the purpose which Bitcoin was designed for, and decentralization is the only function which any cryptocurrency presently excels at over its fiat predecessors. The distributed public ledger that we call the blockchain is a) “distributed” because many, not one, keep the blockchain running, and b) “public” because when you can’t put your trust in a single party, you must see the facts laid out for you. Blockchain was designed to solve problems that simply don’t exist in a system that is administered by a centralized authority.
Decentralization is, in theory, a beautiful thing. Trust requires putting yourself on the line. Whether its your money, your data, or your attention, you trust that the institutions and companies that manage those things for you won’t exploit or squander those things. If you store your photos in Google, you’re trusting that they aren’t looking at them or selling them. If you’re a Russian in the late 90s then trusting the bank with your money was a fatal error. If you’re a Facebook user, you’re trusting that they reward your attention with valuable media (also a fatal error). The potential for digital decentralization to mitigate some of these issues certainly seems like cause for some optimism.
The design of the internet was decentralized from the beginning . Decentralization was critical to allow people to express themselves freely. It also provided the protocols which enabled businesses to bring computer technology to all sorts of industries. Decentralization served the Internet very well in its earliest phases. Since then, massive tech businesses have capitalized on centralization. By exploiting network effects and cheap scalability that are both afforded by software and the internet, they have grown fast and have become so present in our personal lives that many of us can’t imagine life without these companies. Google, Facebook, and Amazon  are the most prominent examples.
When we decide that we can no longer trust these companies, the immense, opaque power they have over our lives will start to feel like a trap. And while cryptocurrencies and blockchain can herald a new age of decentralized alternatives, no decentralized service could be more efficient than a centralized one. Therefore, for any decentralized service to become a successful project, we have to break our addiction to centralization first. That’s going to be an uphill battle.