26th December 2021 > > Decentralisation again.

tl;dr

Resident technical analyst Larry Bloch shares some of his personal insights into the debate surrounding centralisation versus decentralisation, a topic close to all of our hearts.

Market Snap

Market Wrap

We broke $50k to the downside early this morning. It was painful to watch.

Occasional Series – There will be no CCC tomorrow

I know. Gutted. You will get over it in time.

Curious Cryptos’ Commentary – It is Xmas, so I get the day off. Larry, resident techie, is on the case

The more starry-eyed view popular in crypto is that centralised government’s power is based on their control of money which in turn provides them a monopoly on violence which is the bedrock of their control. It is arguable that centralised governments only exist because decentralised governance never had a mechanism to come into being. So we appoint trusted representatives to a central power structure. Therein lies the problem.

Power erodes trust. Crypto provides humanity the mechanism to decentralise governance – i.e. power - in a trustless manner, removing the corrupting influence power has on human trustworthiness. Blockchain tech can change every construct in modern civilisation based on centralisation.

Why trust a bunch of rich white men who “boys club” their way on to the Federal Open Market Committee (FOMC) to manage our financial system, when the same function can be performed by trustless smart contracts whose management is in the hands of a decentralised autonomous organisation (DAO).

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In truth, we’re not even nearly there yet.

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The ability of decentralisation to step up big time is a long way away.

Just having decentralised mechanisms doesn’t provide automatic protection from capture by vested interests. It can be a new power game played by people.

But it is a lot more transparent and – if well designed – would at the very least allow for a robust response when vested interest (or any other power bloc) mounts a 51% attack (aka controlling the majority, aka centralising power). …

These decentralising forces have already begun their long march and are unstoppable.

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We are seeing some early success of DAOs, groups of people able to cooperate without trust.

Think of the Constitution DAO.

This was a bid for a copy of the US Constitution.

Members could not identify each other. They are just random avatars in the metaverse who came together around a cause, organised a decentralised structure to express their common goal, put in a bid that would have won had not that outcome been too much of a challenge to centralised power, and then rather than disintegrate under the weight of the million dollar costs they have to wear despite having nothing to show for it, have now managed to reorganise their DAO to allow for a graceful exit from their (failed) single cause. All of this with no central controlling power structure, without even knowing who they are in bed with.

All managed by smart contracts.

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Constitution DAO is a marker, a gauntlet thrown down in a small but seminal way to those who are unable to accept that decentralisation is not just new but so much better.

Reserve Treasury Protocols (before they all go to zero

With market price now significantly lower than treasury backing price, it seems clear that all these OHM forks are scams.