From Centralized to Decentralized

Society, driven by technology, goes through cycles of centralization & decentralization.

The decentralization phase approaches.

One of the most interesting things I've learned is how much the twentieth century was the product of centralizing technologies: centralized broadcast media (movies, news, radio) as well as centralized production (factories) of centralized armies (tanks, aircraft, nukes), which were all run by extremely powerful centralized states. It can be said the twentieth century was the centralized century.

Using our technological determinist perspective, we’d say it was difficult to coordinate California with New York in the 1800s, necessitating some degree of independence. This changed in the 20th century, when one face could now be broadcast to millions. The cult of personality and centralized coordination of people enabled total war. One person, even if right, could not stand against many. To disagree with the whims of the crowd meant death in many countries for many decades.

Technology started enabling decentralization with the personal computer in the late ’70s, then with the internet in 1991, and now with bitcoin. The twenty-first century may be in many ways opposite of the twentieth.

The year 1950 was peak centralization. In 1950, you had one telephone company, two superpowers, and three television stations: AT&T; the US and USSR; and ABC, CBS, and NBC. Everything was super, super, super centralized. There were just a few choke points in everything, with very little choice. Everything was homogenized. Everybody was watching the same shows on television. Society was all flattened out and smoothed out.

As you go backward and forward, things start getting more decentralized. Moving forward, you get cable television, the internet, blogs, social media, and cryptocurrency. One of the really fascinating things is, when going backward in time, it's as if we're rewinding the tape with certain events from the past, now appearing in the future, but out of order.

This is just one interesting theory: our future is our past.

It’s not so much that decentralization is a panacea. It’s that when you are over-centralized, you decentralize. And then, if people over-decentralize, they recentralize—but around new hubs each time.

So it’s bundling, unbundling, then rebundling.

Decentralization doesn't mean an absence of leadership. It means a choice of many leaders. Crypto has allowed millions of people to partially exit their existing financial and political systems for large-scale experiments in self-governance and self-determination…even if not all of them have realized this yet. Decentralization restores the consent of the governed.

Why does decentralization win in the long run? With millions of developers and billions of phones, the internet is now essential for daily life, and crypto is built to be international, private, and monetizable without a central entity. It’s hard to stop these decentralizing technologies.

You can summon the CEO of Facebook to Congress. You can’t summon the “CEO of email” to Congress. There is no CEO. That’s where this is all going.

Censorship incentivizes decentralization.

The state has six hours of compulsory education per day for kids. What’s interesting is the internet is getting a lot of those hours, taking them away from the state. Kids are plugged into their laptops, iPads, and iPhones, self-educating instead of having compulsory state education.

An interesting thing is happening when kids are plugged into a different network, not the state-approved network, during their nascent years. They’re plugged into their own communities and subcultures. The state today has a lot less control over kids as they’re growing up.

If you go all the way back to why Bismarck instituted public education, you’ll learn it was really to raise children who were “obedient to the state,” who were patriots. That acculturation is happening less and less because kids are seeing people who have different ideologies at a much younger age, with a lot of interesting medium-term consequences.

Downsides are obvious. You have kids who are less able to make eye contact because they’re staring at a screen all day. Literally, maybe, their eyes physically can’t focus at medium distance as much anymore. It’s harder for kids to focus on books and to do deep reading because they’re constantly distracted by notifications.

The upsides, of course, are they have access to the Library of Alexandria for free any time. If they’re really good at math or computer science or have any other interest, they can find like-minded communities. They’re not forced into twelve years of one-size-fits-all quasi-jail at modern American public schools. Instead, they can self-educate, self-advance, and level up. I think lots of kids are going to be remote working at a much earlier age. We certainly will have 20-something billionaires. We’ll probably have a teenage billionaire soon, if we haven’t already had one.

On balance, I think it’s probably positive on the net, though we want to figure out some way to ameliorate those downsides.

Everything technology is doing means more upside, more downside. That’s my one-liner for the future: more upside, more downside.