The “cryptoratti” descended on Palm Springs last week looking to get back to the golden days when conferences were small, friendly talking shops. Crypto Springs, the desert city’s inaugural crypto and blockchain conference, promised to showcase some of the most exciting projects and sharpest tools in the industry, and it did. But here among the palm trees and inflatable flamingos, as elsewhere in the cryptosphere, there was one word that dominated poolside conversation: decentralization.
Decentralization is perhaps the biggest philosophical thorn in the industry's side. To summarise, there are two broad camps: the die-hard decentralizers and the decentralized-with-a-bit-of-centralized-control group. The former argues that all power should be scattered as far and wide as possible, the latter says that some centralized governance is necessary to streamline planning and execution. Both have their pros and cons. It’s an issue that existed long before blockchain came along (McKinsey has done a fair amount of thinking on the topic), but blockchain’s promise was to wrest power out of the hands of the privileged few and place them in the hands of the masses. So, what to do?
At Crypto Springs, the debate nudged and flicked at all aspects, privacy versus usability, growth versus product, one noteworthy exploration was Dandelion’s approach to privacy on bitcoin. But guidance on governance, which some see as the biggest issue of all, was sorely lacking.
Since the SEC (U.S. Securities and Exchange Commission) explicitly identified “decentralization” as a determining factor in whether it categorizes a crypto-asset (aka token) as a security, industry debate about decentralization’s scope, nature and its very meaning has been rife. And this event was no exception.
The opening salvo was delivered by Lighting Labs CEO Elizabeth Stark, one of the conference’s co-organizers, who waved the flag of decentralization above all. “The goal of this technology is to remove intermediates, to take out the middleman, give people access, achieve autonomy and financial sovereignty—decentralization, broadly,” she said.
Following in her footsteps was Parity’s Jutta Steiner and her talk, “Envisioning a decentralized web.” While her idea for enabling decentralized networks to work together was a fascinating one, her talk gave little in the way of the envisioning bit.
Dogecoin inventor, Jackson Palmer, explored the semantics of what decentralization really is, versus its use as a byword for marketers looking to cash in on this newest of gravy trains.
“One of the challenges of quantifying decentralization is that any softness gives a lot of wriggle room for facts to be misrepresented,” he said, adding that there is “a strong marketing drive to prove things are decentralized.
“I don’t think there’s ever going to be a perfect decentralized system but we can do a better job.”Jackson Palmer, Dogecoin inventor
Crypto Springs co-organiser, the charismatic and controversial Meltem Demirors, however, hit back at those arguing power should be devolved with an eloquent analogy plucked from nature to advocate for control be more concentrated. “In biology, we see hierarchies exist because messaging between 10 trillion individual cells is really costly and very energy intensive. That’s why, in biology, organisms are organized in structures, so that communication occurs between root entities, there is a pecking order.”
Demirors referred to decentralization as a spectrum, requiring solutions that involve complex trade-offs between privacy and security to achieve what many users actually want, which is less responsibility.
But while Demirors acknowledged the problem, the overriding theme to come out of this very pleasant two-day discussion was that more work needed to be done on creating a clear and concise definition of what decentralization really is, as opposed to what the best path might be going forward.
On Day 2, Amber Baldet, former blockchain lead at JP Morgan, picked up the mantle left by Day 1’s discussion and dug firmly into the definition of decentralization problem. While Baldet tried to put one foot in both camps, her presentation, which included the below infographic, stated decentralized networks were optional rather than compulsory--effectively creating a third trail of thought that would be surmised as, “who the hell cares?”. “It just depends on what you want to design,” she explained, adding that “a blockchain is only one of many possible approaches to decentralization.”
Moving on from the elephantine topic of decentralization to industrial ethics, a presentation that brought widespread consensus (get it?) and rapturous applause was Elena Sofia Giralt’s appraisal of the terrible situation in Venezuela, which has found itself an unwilling petri dish for President Madura’s ill-advised Petro experiment. Giralt, the Operations Lead at Civil (a platform designed to help restore faith in journalism), dubbed the Petro the “Frankenstein Coin” and described how, even though the country is currently on its knees, soon salaries, state pensions and services will all be pegged to the unpopular Petro—“a bridge too far for what most Venezuelans are dealing with,” she warned.
It was a moment of clarity for an industry, and a conference that struggled to see its purpose through the potential. Both have a boatload of talent and ideas, but as yet, no one has yet to come up with a suitable captain to steer the ship in the right direction that everyone can agree on.
And yet, we’d be wise to remember where we are on this non-linear, decentralized journey. “We’re really just at the beginning,” concluded Elizabeth Stark. “So come join in the crazy cult!” We were definitely drinking the Kool Aid. And it was good.