A decentralised understanding of decentralisation (ramblings)

Decentralisation is one of those crypto-bro words that's bandied around as being universally good, but I'm pretty sure most people who use it haven't really sat down and had a deep-think about what it actually means.

In short I think the understanding of decentralisation is quite probably... decentralised.

Now obvs the (im)precise meaning of the term is going to vary depending on what exactly you're talking about... decentralist ideas of politics are going to be different to those on economics, different again to ideas within whatever spheres of maths or physics or geology you're talking about.

At this point I kind of want to say that decentralisation is going be dependent on what your concept of centralisation is, but I'm not sure that's right, given that one possible conception of decentralisation, in maybe a postmodern twist on the word, is for it to be the anti-thesis of centralisation and thus completely non-dependent on that other concept.

Or maybe it's impossible to conceive of decentralisation without centralisation to compare it to?

TBH this is a brain splurge, but you see already there's A LOT to think about after only 1 minute of brainstorming the concept. Already enough to show there's a possibility that any conversation you've ever had which has ever referred to decentralisation without digging into the deeper meaning behind the word could be a conversation in which you and the other conversers are talking about TOTALLY different things without you even realising it, because you all have TOTALLY different conceptions about what decentralisation actually means....

I think to go any further we need to focus on one thing, let's take Bitcoin....

Bitcoin is.....

I mean literally there it is on Wikipedia....

"Bitcoin is the first decentralized cryptocurrency" and then it goes on to explain how BTC is a P2P network, a distributed ledger (a phrase thats burned on the back of my eyelids I've seen it so much) and then with no central oversite....

Some further explanation about how every (full) node has a copy of all the txs and then something about mining...

But I mean what does this ACTUALLY mean...?

What exactly is decentralised...?

Looking at BTC MINERS, based on hash rate distribution, approximately 50% of that is controlled by just 5 mining pools....

But then again these pools aren't controlled by one person, but lots of self-interested actors pooling together in one network....

So we've got thousands of nodes if you like all confirming transactions, and any one individual actor can jump into the network and pool and mine, or more likely just send and receive BTC. And with BTC the money generation and other transactions are all on the same network....

There is no central authority, but I've actually got no way of measuring how far we are away from a central authority, because I don't know how 'centralised' any one of those mining pools is.

Based on those stats above I guess the best I can is that we're 17.774% towards centralisation in terms of control of the entire lot of BTC processes.

Is it even possible to compare this to, say, the dollar...?

I mean take printing the dollar....

Well that is centralised in terms of what people with the power currently can do.... they can instigate QE at the drop of a hat and pump more dollars into the system, no one outside of that inner cabal at the FED can stop that.....

However it's not quite that simple is it - that inner cabal does have to take account of what other actors think and how that printing could affect the wider economy, they don't have ABSOLUTE POWER, there's not perfect centralisation, and if they print too much, too fast, the system collapses and they will be removed.

And then when it comes to sending and receiving dollars, well if we're talking cash at the local level, surely that's MORE dentralised than BTC because it doesn't depend on anything other than me giving you those dollars.

While at a global level I could hand those (printed) dollars to someone else to carry to you, a trusted third party of my choice.

And all of that is independent of a computer network.

So another question when comparing centralisation, do we have to take account of the technologies which the different currencies are dependent on in the immediate term - BTC ALWAYS dependent on computers, a virtual network, dollars, not so.....

Final thoughts...

I'm in a thinking out loud moment, but I'm feeling that comparing degrees of centralisation or decentralisation in regards to BTC/ FIAT is really meaningless, the two are so different, it doesn't make any sense.

Posted Using INLEO