A useful, critical taxonomy of decentralization, beyond blockchains

Not all who decentralize are bros.

I keep getting sucked into discussions of web3, decentralization and cryptocurrency. It’s only natural: much of the rhetoric and stated goals of the people behind these technologies intersect with my longstanding causes, like access to cryptography and decentralized communities (what we used to call P2P).

The reason I say I get “sucked into” these discussions is that, despite the rhetorical overlap, I’ve sensed a significant ideological divergence between my position and the dominant web3 ethos. In general, I would say that I think there are only a few circumstances in which markets produce good incentives and distributions, and that these depend heavily on publicly accountable governance that set up their rules.

Which is not to say that I reject markets altogether. As John T Harvey — the “Cowboy Economist” — says, an economist who says that we must always use markets to attain our goals, or never use them, is like a carpenter who says, “I will only join those two pieces of wood together with a nail; screws are for commies!”

So I think markets are a tool, not a ethical imperative, and I think the core of the web3 project not only values markets beyond their worth, but also sees the problems of markets as the result “distortion by regulators” and wants to eliminate the publicly accountable governance (AKA “deregulating”) that I see as essential to getting good results from markets.

That means that while I often find myself having conversations with web3 advocates that feel like the excited conversations we had 20 years ago at the old O’Reilly P2P conferences (which I sat on the committee for), beneath the surface, there’s a deep and meaningful rift.

Here’s a superficial but telling example: when I decided to write this post, I had to brainstorm a graphic for the top of it. After some image searches, I decided I’d just go the hacky route and pull out my old Oxford English Dictionary and take a picture of the definition of “decentralization,” then jazz it up with the familiar topological diagrams illustrating different models of decentralization.