Kaal claims by topic: decentralization, page 2

636 atomic, individually citable claims from the published work of Wulf A. Kaal tagged decentralization.

Trust in decentralized legal solutions can be more democratically legitimized than legally created trust because it runs through microdemocratic, individualistic yet technology centric autonomous decision processes, coded guarantees, and machine speed. 2020
Personal assets such as data, preferences, and opinions can only be commercialized to a limited extent in centralized structures, whereas decentralized structures allow those same assets to be tokenized, valued, and mobilized. 2020
The long-term benefit of blockchain technology for the common good of humanity depends on decentralized infrastructure development; blockchain for good projects can only realize their potential as that underlying infrastructure emerges. 2020
Tying a DAO's legal existence to an existing legal and jurisdictional framework typically forces the DAO to appoint a representative in that jurisdiction, and that representative centralizes the DAO, which causes the DAO concept itself to fail. 2020
DAOs require values shared by their members in order to unify the membership and guarantee stability of cooperation while the structure remains decentralized. 2020
The longevity of a DAO depends on its ability to maintain the fluidity and decentralized order that existed in the DAO's initial stages. 2020
Absent continual effort to maintain decentralized order, the very values that initially unite DAO members tend to produce ever tighter and more complex hierarchical structures inside the DAO, ending in a fully centralized tree structure. 2020
Lasting legal solutions for DAOs must increase and maintain the decentralization already achieved inside the DAO, because DAOs cannot exist and persist without ever increasing degrees of decentralization. 2020
Existing legal solutions for DAOs typically require some form of legal representation in the relevant jurisdiction, and jurisdictional requirements pertaining to legal representation are always a point of centralization. 2020
Where a DAO's internal voting mechanism is centralized and burdened with legacy voting problems, any higher degree of decentralization achieved in its external legal design will typically be cancelled out over the long run. 2020
When the degrees of internal and external governance decentralization cancel each other out, the DAO is less likely to succeed in its decentralization attempt and correspondingly more likely to fail. 2020
The expected growth rate of DeFi, across diverse estimates, is large enough to call into question the long term viability of the existing decentralized technology infrastructure unless core infrastructure improvements are made. 2020
The assumption by ICO issuers that token sales let them circumvent securities registration and disclosure requirements proved to be a fallacy for many U.S. issuers, who faced increased SEC enforcement actions in late 2019. 2020
Anonymity in decentralized networks imposes a specific design constraint: system architects need a special skillset to navigate the limits that anonymity places on system design, and that skillset remains very rare in the early 2020s. 2020
DeFi platforms grant the unbanked access to the loan market by disintermediating existing banks, connecting borrowers and lenders directly in peer to peer networks and accepting digital assets as collateral with far less documentation than banks require. 2020
Centralized financial technology does not complete the disintermediation it promises, because users still deal with a technology company as intermediary instead of a financial institution, which leaves room for the decentralized solutions DeFi attempts to provide. 2020
DeFi is more efficient than existing financial intermediation including FinTech, and that superior efficiency traces to its extensive reliance on code and automation, which removes large parts of the human element and the errors and inefficiencies that come with it. 2020
DeFi's decentralization remains theoretical in one important respect: as of the early 2020s DeFi is still largely relegated to one dominant platform, with 87 percent of all publicly funded DeFi projects built on Ethereum. 2020
In the early 2020s the DeFi technology infrastructure was insufficiently developed to support DeFi growth estimates and growth potential, and fulfilling that potential requires significant tradeoffs between scaling, security, and levels of decentralization. 2020
The Bank of Canada's year long Jasper trial revealed a tradeoff rather than a solution: Ethereum would make the wholesale payment system more resilient but was costly and raised privacy issues, while Corda addressed cost and privacy but made the system less resilient, and the Bank concluded in May 2017 that blockchain was not mature enough to run a national interbank payment system. 2020
The concept of a DAO fails if it becomes centralized, and centralization in governance is the largest single threat to a DAO. 2021
Tying a DAO's legal existence to existing legal and jurisdictional frameworks typically requires a representative in the chosen jurisdiction, which centralizes the DAO and results in the failure of the DAO concept. 2021
DAOs cannot exist and persist without ever increasing degrees of decentralization, so DAO legal designs must first and foremost supplement the internal decentralization the DAO has achieved. 2021
Existing legal solutions for DAOs typically require some form of legal representation in the relevant jurisdiction, and such representation is always a point of centralization. 2021
Without continual effort to maintain decentralized order, the values that initially unite DAO members tend to produce ever tighter and more complex hierarchical structures inside the DAO. 2021
If a DAO's internal voting mechanism is more centralized and carries legacy voting problems, a higher degree of decentralization in its external legal design will typically be canceled out in the long run. 2021
Any set process or set of rules that can ever be designed will ultimately fail to secure a network for all time, so no static rule set can serve as the permanent foundation of a DAO. 2021
Strict letter of the law regimes, which the authors call protocol centralization, produce rigid and temporarily efficient hierarchies, but that same rigidity generates instability and eventual collapse. 2021
Protocol centralization, meaning rigid and immediately enforced rules such as those executed by smart contracts, leads to instability unless it is implemented wisely. 2021
Because decentralized organizations have no leaders and no hierarchy of control, any governance process must be instituted from the very beginning; it cannot be added later by an authority. 2021
Social media platform owners do not know and cannot choose which content will matter; the answers are held in the behavior of the network of users, and the companies merely monitor network transactions and analyze them statistically with automated algorithms. 2021
Rapid movement of edge knowledge into the mainstream via social media is not costless: it can dissolve existing societal consensus, social cohesion among established groups, and order in the process. 2021
Social networks grow exponentially more powerful through the network effect, but they are stifled by the centralized ownership and governance of the Web 2.0 companies that run them; governing decentralized information flow requires decentralized incentive designs. 2021
Because centralized owners control the platform software they control the market and can dictate prices, charging non transparent fees that adjust to real time supply and demand to maximize their own profit. 2021
A truly decentralized organization requires that its rules be transparently available to all members; otherwise the keepers of the knowledge acquire higher status and a hierarchy forms. 2021
If any single person could own the copyright to software that a decentralized organization uses, that person would hold de facto power over the organization, re establishing hierarchies of power inside it. 2021
The Apache Foundation's minimal governance works only because its members are not competing for power and money within the organization, which limits how far the model can be transferred to for profit settings. 2021
Earlier centralized companies defeated more decentralized peer to peer platforms because of the technology of the time and the incentive design built into capitalist civilization: consumer devices could not match industrial upload speeds, centralized firms had the incentive to polish user interfaces, and economies of scale made central bureaucracy worth negotiating. 2021
Bitcoin proved that a decentralized peer to peer network can manage valuable assets without a central authority, but the centralizing force of competition concentrated power anyway, as economies of scale produced large mining farms in place of millions of individual members maintaining the ledger. 2021
Decentralization is most valuable in chaotic times because the most talented members for a task are not blocked by a rigid hierarchy, unlike bureaucracies that respond to new problems with an outdated structure. 2021
Hash functions let a leaderless network reach consensus on identity and ordering, because every node independently hashes a transaction's data and deterministically arrives at the same unique identifier that everyone recognizes. 2021
The more digital assets are held by their owners in self-custody, the less likely intermediation by custody service providers becomes, so self-custody is the key driver of decentralization in emerging blockchain networks. 2021
Centralized cryptocurrency exchanges require users to hand over their assets and then act as custodian, issuing what are essentially IOUs for users to trade with on the platform. 2021
The unprecedented growth rate of decentralized exchanges may be an early indicator of increasing reliance on decentralized self-custody by retail users, but mainstream institutional adoption of digital assets is unlikely to materialize through self-custody and DEXs. 2021
While the majority of cryptocurrency spot exchanges require ownership to be surrendered in order to transact, decentralized exchanges introduce the ability for users to transact without exposing their private keys to vulnerability. 2021
Applying current legacy custody rules developed for traditional assets to digital assets is inconsistent with the foundations of decentralization, because the very nature of a decentralized system mandates the avoidance and eradication of intermediaries for business transactions. 2021
Where owners do not rely on the cryptography of the wallet and of each transaction to avoid trusted third parties, single points of failure, rent seeking behaviors and other suboptimal outcomes of legacy systems inevitably seep back into decentralized solutions. 2021
Delegation of rights to custody providers is only an incremental step toward centralization via delegation to third party investment managers, and it opens a floodgate because each additional level of investment discretion over digital assets exacerbates centralization concerns and compounds rent seeking suboptimalities. 2021
Taking the realities of decentralization and decentralized self-custody seriously would require investment advisers to provide digital asset investment advice for a fee without ever taking custody of the assets. 2021
The six types of decentralization are not independent: each is subject to its own iterative process and affects the others through feedback effects, so proliferation in one type progressively changes the others. 2021
Because the instruments of scientific development and research are themselves centralized, the scientific consensus they produce is naturally centralized as well. 2021
Journal publication incentives systematically bias the scientific record: journals prefer papers that reject the null hypothesis, use big datasets, and show big effect sizes, so significant findings failing those criteria may simply be ignored. 2021
The centralization of scientific methods and output has produced suboptimal outcomes for society, as evidenced by widespread irreproducibility, by non-expert forecasters often outperforming experts, and by random stock selection outperforming expert selection. 2021
Increased networkability drives decentralization of science because it lowers the cost of ascertaining the accuracy of scientific results while raising the price a scientist pays for being inaccurate or wrong. 2021
The transition from client-server computing to peer-to-peer networking was the most significant step in the evolution of decentralized technology, because removing centralized hosts lets nodes make disk storage, bandwidth, and processing power directly available to each other. 2021
Societal path dependencies toward hierarchy and top-down command and control impose significant obstacles on organizational decentralization, hindering the transition of power from governments and large hierarchical organizations to the edges. 2021
Organizational decentralization can raise economic performance without new technology: Jack Welch's separation of GE business units, each with its own profit-and-loss statement and full accountability, allowed efficient and profitable operation and GE's market value skyrocketed as a result. 2021
Decentralized autonomous organizations epitomize organizational decentralization because the first DAO, built purely on code and smart contracts with no incorporation, physical address, or headquarters, entirely removed all traditional control mechanisms employed by principals in agency relationships. 2021
Because human brains simplify complex systems for coherence while complex adaptive systems evolve through self-organizing group behavior, decentralizing the interaction of DAO developers would support random developer interaction and make developer perspectives on software development more diverse. 2021
At the beginning of the 2020s no forum existed that could support truly decentralized software development with a sufficient incentive design. 2021
Markets whose trades do not depend on physical location evolved without centralized coordination, as shown by the foreign exchange market, which developed decentralized because currency trading required no physical location. 2021
The digitization of content is the most lasting contribution to market decentralization, because the physical location of assets matters less as content is digitized and virtual products emerge, so markets are becoming increasingly decentralized. 2021
Decentralized cryptocurrency exchanges epitomize market decentralization because they let users interact and trade anonymously in a secure environment without third party intermediation. 2021
A decentralized exchange can be seen as architecturally centralized, because the DEX code and its operational rules in effect create the exchange and provide a central order exchange and price discovery function rather than a peer-to-peer exchange. 2021
Governmental decentralization is the transference of responsibility and authority for public functions from centralized governmental agencies to centrally subordinated but quasi-independent public or private entities, and it is incommensurable because of its different kinds, degrees, and dimensions. 2021
Local governments and private organizations can rarely fulfill government functions effectively without control over an adequate level of revenues, and that revenue control must be tied to authority over local expenditure decisions to be effective. 2021
The degree of success in governmental decentralization is tied to the level of accountability instituted in the process, and accountability in turn depends on the availability of transparent public information that lets the community monitor local government performance. 2021
Decentralization is not always efficient, because centralized economies of scale can create the near-optimal efficiencies for economic growth and decentralization may therefore result in the loss of economies of scale. 2021
Standardized network-based services are very difficult to improve with decentralized approaches when local technical and administrative know-how is suboptimal, and this suboptimality is worsened when the local government lacks adequate financial resources. 2021
Government decentralization at the local level can favor local elites and may overcomplicate the coordination of national policies. 2021
Silent governmental decentralization occurs without explicit policy: unlike affirmative reform, it results from inevitable changes in policy emphasis, networks, and resource availability, and can lead inevitably to a more decentralized system. 2021
Governmental decentralization tends to occur during political or economic crises, because the fall of a regime and the resulting power vacuum causes power struggles, and it is during those struggles that forms of political decentralization emerge. 2021
Regulatory sandboxes are an instance of regulatory decentralization: by lowering regulatory barriers and costs for testing disruptive technologies while protecting consumers, the regulator fosters innovation in increasingly decentralized products and services. 2021
As each form of decentralization empowers heightened proliferation of the other forms, individuals perceive more opportunities for changes in consumer behavior, silent withdrawal, disengagement, and defiance of the established centralized order. 2021
The founders' initial vision of a truly decentralized internet without central points of failure could not be fulfilled, which is why internet idealists continue to seek technological ways to re-decentralize the internet. 2021
Improved incentive design is necessary but not sufficient for decentralization: better decentralized incentive designs can accelerate adoption, yet design alone will not produce the decentralization of business and society, because adoption depends on society's acceptance and use of the technology. 2021
Legacy businesses actively neutralize decentralized competition by acquiring little known companies that hold highly competitive decentralized technologies, as Microsoft's acquisition of Skype illustrates. 2021
The libertarian and reformist orientation of the crypto community itself neutralizes decentralization, because the strong idea of reforming society with decentralized technology makes cooperation with existing centralized structures often suboptimal. 2021
Proof of Work block rewards structurally reintroduce centralization: the economic nature of mining rewards incentivizes degrees of centralization through collective action of nodes that share rewards as a group, that is, mining pools. 2021
Early stage consensus designs such as PoW, PoS and DPoS create a community belief system in certain foundational technology features that in effect inhibits higher degrees of decentralization, so suboptimal early decentralization becomes self perpetuating. 2021
The decentralization of network technology is capped by its host environment: decentralized systems are built on and confined by the internet, which is decentralized in its foundation but has a centralized order structure. 2021
Centralization follows an S curve: in the expansion phase the benefits of centralizing power, capital and control rise faster than its costs, but in the decline phase the rising costs of centralization, including corruption, diseconomies of scale and cronyism, can no longer be offset, so centralized systems function less optimally and less efficiently. 2021
Even where superior decentralized technological solutions exist, the centralized elements deeply engrained in business and society can be perpetuated by the efficiency gains of the S curve of centralization, so superiority alone does not displace them. 2021
Unintentional methodologically centralized design features in complex decentralized systems are inevitable, because human brains naturally simplify complex systems for the sake of coherence and designers therefore reach for centralized features that increase coherence. 2021
Biomimicry as a route to decentralized design optimization is disadvantaged ab initio, because nature's decentralized design is the product of millions of years of experimentation while human science is flawed until proven otherwise. 2021
To emulate nature's decentralized design, human designed decentralized systems must build experimentation with workable designs into the system as a core feature, yet at the beginning of the 2020s very few decentralized systems or design proposals incorporated such experimentation features. 2021
Because humans crave certainty as complexity grows exponentially, they favor dogmatic approaches, and dogmatic approaches to new problems are unlikely to yield the needed solutions while groupthink and other forms of dogma undermine society's collective intelligence and decentralized decision making. 2021
Decentralized legal infrastructure solutions were almost entirely missing in the early 2020s despite strong demand, because other prerequisite decentralized infrastructure products, notably a functional public blockchain, were still missing. 2021
Centralized algorithmic automation, defined as artificially intelligent systems taking over core functions in human society, poses perhaps the greatest threat to decentralization. 2021
An algorithmic future in which most human decisions are predicted or performed by algorithms threatens human individuality, and the resulting loss of diversity of human experience and of unpredictability threatens the diversity of nodes in decentralized systems. 2021
Decentralized infrastructure is interdependent across layers, so even a fully developed and instantiated infrastructure product in one area may collapse without supporting decentralized infrastructure products in other, inevitably related areas. 2021
Fintech is a precursor of decentralization rather than merely a financial innovation, because it pushes information toward the edge of the system and forces disrupted financial conglomerates to serve consumers better. 2021
Digitization was the precondition for peer-to-peer transactions at scale, and the digital transformation of business enabled, for the first time in history, decentralized production at lower cost. 2021
The social media coordination function is still largely flawed because the incentive design underlying social proof is suboptimal; decentralized technology solutions can take over that coordination function and improve it. 2021
The networked information economy, built on peer-to-peer exchange of information, may be replacing the centralized industrial information economy of the late nineteenth century, because cheaper access to information enables a much greater role for decentralized individual action. 2021
The absence of a centralized authority makes open source projects prone to separation movements, because rival developer cliques form their own belief systems about the direction of development with no authority to resolve the dispute. 2021
The degree of decentralization of an open source project is determined by the degree of hierarchy in its governance: a flat structure with consensus decision-making and no power disparities between developers is the most decentralized form. 2021
Open source communities are not immune to centralization, because humans have a natural inclination to convert knowledge and resources into power over others, which is why projects such as Apache developed multiple ranked developer tiers with unequal voting rights. 2021
Tokenizing an existing real-world asset such as fractional real estate cannot be done without a sufficient depth of decentralized infrastructure solutions. 2021
Cloud computing is the enabling substrate for decentralized solutions rather than their competitor, because it has already established that applications can talk to each other, an integration that decentralized networks will extend. 2021
Future peer-to-peer networks will thrive on dissimilarity rather than redundancy: nodes contributing dissimilar resources and capabilities let the network perform tasks no individual peer could perform, and making those capabilities available to all nodes attracts further nodes. 2021
Decentralization requires its own infrastructure; the technologies of the internet era and its progeny alone may not suffice, and fully decentralized technologies require an enhanced decentralized network infrastructure. 2021
Without basic decentralized infrastructure products in place, on-chain governance of blockchains is not possible or is only limitedly possible, and the blockchain ecosystem may not be able to grow without a core decentralized infrastructure such as a functioning public blockchain to build on. 2021
The decentralized economy cannot fully proliferate until it acquires the institutions ordinary commerce depends on, above all a secure and meaningful reputation system for anonymous supranational partners and an effective, dynamic governance system. 2021
Blockchain transactions will always be expensive compared with other peer to peer transactions, because blockchain data must be stored eternally and redundantly on as many machines as possible to support decentralization. 2021
Decentralized banking addresses blockchain scaling, because the linear structure of a blockchain means that doubling the number of participants and transactions halves its speed. 2021
Maintaining consensus without a central authority forces a reputation system to verify members' votes extremely redundantly, which imposes serious computational overhead. 2021
The application that decentralized banking improves most is not currency tokens but reputation tokens, because reputation transactions such as voting and resolving validation pools are generated by every meaningful action. 2021
Decentralized insurance requires networks of policy writers carrying individual reputations, since efficient underwriting of every type of transaction depends on those reputations. 2021
Applying Web3 technology to chit funds replaces the foremen and their commission with smart contracts, which eliminates the risk that a foreman absconds with the fund. 2021
Decentralization empowers knowledge at the edge: individuals with fine grained information about their neighbors and community can make better underwriting decisions than a centralized hierarchy can. 2021
Concentration of power, especially monopolies or trusts, decreases market liquidity, while decentralization of power improves it. 2021
It is not possible to create a centralized regulator like the SEC for the decentralized economy, because doing so would place a supranational market under competing jurisdictions with naturally contradictory regulations. 2021
Because the tension between efficiency and security demands a careful estimate of the hot money ratio, a sophisticated decentralized governance system is crucial for any efficient stablecoin. 2021
The decentralized economy still lacks trustworthy open source decentralized institutions for recording and parsing history, reporting news and guiding attention, without which the average person cannot judge which networks to join or what to invest in. 2021
Benevolent dictatorship is more efficient and effective than messy democracy in the short run, but centralized governance of that kind threatens the long term stability of a powerful public peer to peer network. 2021
No major blockchain is entirely decentralized, because all of them lack binding, coded, anonymous peer to peer governance; on chain and off chain governance experiments to date fall short of that standard. 2021
The absence of a governance process is especially dangerous for peer to peer platforms precisely because decentralized organizations find it extremely difficult to change their rules once established. 2021
Internal competition for profit creates a natural tendency to centralize power as members differentiate themselves through wins and losses, and this centralizing tendency is an additional destabilizing force on a decentralized organization. 2021
No centralized platform such as Amazon or eBay has been able to create meaningful and secure online reputation, because central ownership and control prevent them from giving members the power and incentives needed to police their own reputation. 2021
Because major social media platforms are privately and centrally owned, their governance processes and reputation distribution algorithms are necessarily opaque, since their users' incentives are not aligned to police reputation against gaming. 2021
A radically decentralized economy cannot be achieved incrementally: eight institutional problems that centralized business solved centuries ago must all be solved simultaneously, and their solutions must be integrated with one another. 2021
Prototypes exist for only two of the eight required institutions, decentralized currency in Bitcoin and distributed computation for smart contracts in Ethereum, and most of the rest are still missing. 2021
Decentralizing the power structures of core institutions improves them in both effectiveness and efficiency, because decentralization supplies transparency and liquidity. 2021
Digital information storage makes decentralization newly viable because every participant can hold the authoritative record of the organization's entire history, removing the need for a central authority over the record. 2021
Networked communication makes complete bureaucratic transparency possible, because every member of an organization can connect immediately with every other member worldwide at speed and low cost. 2021
Historically, whenever a healthy decentralized organization began to earn money it quickly devolved into a centralized institution, because its uniting ideals shifted from transcendental value to a desire for money. 2021
Once the equalizing ideal that moderates a decentralized organization is lost, competition generated by the profit motive leads inevitably to centralization with rigid rules about who holds power and wealth. 2021
The largest and most decentralized organizations of the present are non-profits, which is evidence that decentralized organizations have historically struggled to survive economic success. 2021
Decentralized organizations can survive economic success, because current digital tools permit secure and efficient accounting of high transaction volumes so that money can be shared appropriately without centralized dictators arbitrating the dispersal of funds. 2021
If an organization's goal is to maintain decentralization, its tools must be used deliberately to prevent the natural concentration of power that occurs when economic inefficiencies create pockets of corruption where rent-seeking actors accumulate. 2021
Without a secure and meaningful reputation system, none of the other aspects of the decentralized economy will be effective, which makes reputation a precondition for the rest. 2021
Reputation and governance are the two most important institutions missing from the decentralized economy, and once they are solved the remaining missing pieces are relatively easy to supply. 2021
Underwriting, like policing, can be decentralized and automated, which gives each network member the power to choose the level of security they require. 2021
Effective decentralized DAO governance necessitates reputation verification systems. 2021
Because algorithmic automation guides societal outcomes, it benefits some groups over others whether or not its owners and developers intentionally manipulate those outcomes, which makes centralized ownership and control of algorithmic automation an important societal issue. 2021
Taken to the extreme, centralized control of algorithmic automation could negate human input in data systems where those systems are designed to ignore individual choice in favor of the goals of the platform owners. 2021
Keeping a decentralized organization aligned in pursuit of its goals requires providing something more valuable than money, namely reputation, following the Maghribi traders' example. 2021
Centralized and opaque reputation systems such as China's Social Credit System are unstable in the long run and particularly dangerous, because their computerized bureaucracy makes them inherently rigid and their early successes make them progressively more brittle. 2021
Removing the middlemen who serve as business catalysts would kill the economy: liquidity would dry up because after a few people unfairly lose on business deals, no one will take the risk of initiating one. 2021
Bitcoin demonstrates the power of decentralized cooperation and transparency: after a decade without centralized oversight, no network transaction has sent the wrong quantity or gone to the wrong account and no bug has produced an accounting error in a system worth hundreds of billions of dollars. 2021
Despite billions of dollars of investment, radically decentralized tools including bitcoin currency, Ethereum smart contracts, and the InterPlanetary File System have not pervaded the mainstream economy. 2021
The killer app for the decentralized economy is the DAO, a company governed autonomously by smart contracts and organized without any single permanent governing authority or concentrated ownership, whose existence would justify the other decentralized overhead tools. 2021
New DAO proposals appear almost quarterly in the 2020s and most fail because of a lack of decentralized governance solutions. 2021
Regulatory approaches of the early 2020s largely undermined the evolution of decentralized technology, because decentralized solutions at their core negate external control, censorship, and oversight while the legal initiatives treated government control as indispensable. 2021
The more decentralized products are, meaning more censorship resistant, autonomous, and beyond regulatory control, the more they are left in a regulatory vacuum, and the resulting legal uncertainty limits their expansion, reach, and evolution. 2021
Centralized company formation is supported by an enormous infrastructure amounting to all of civilization, so the entire environment of the decentralized economy must be built before it can support its first truly successful DAO. 2021
Unless the Web3 vision builds at least the features and social advantages of the current political and legal systems into its economy, the decentralized economy will merely be a parasite on the dying host of the traditional mainstream economy, and once the host dies today's social advantages will be lost. 2021
Without decentralized versions of the services that overhead institutions provide, including justice, media, banking, underwriting, and insurance, DAOs will not be able to compete with centralized companies. 2021
Interoperability, meaning the API economy, is most efficiently achieved in the long run on decentralized platforms, because negotiations on a level playing field are fairer, resolve quicker, and encourage more business. 2021
Because we are reared in a centralized world we reflexively turn to centralized solutions, but a decentralized approach is more effective for global problems, since decentralized networks encourage interoperability through bureaucratic transparency and thereby integrate data better than a single dictating source. 2021
Because more powerful members of a hierarchy are better positioned to capture whatever power becomes available, power distribution in an entrenched hierarchy becomes exponential, leaving the majority with minimal power and wealth. That discontent of the majority is the first destabilizing force acting on a centralized organization. 2021
Rigid hierarchies are unstable and inevitably fall, eroded either by internal corruption or by novel external challenges that the hierarchy is not flexible enough to adapt to. These are the second and third destabilizing factors, alongside majority discontent. 2021
The unusual multi-millennial stability of Ancient Egypt and Imperial China, despite their strong political hierarchies, is explained by protocol decentralization rather than by any feature of their political centralization. 2021
Imperial China invented the printing press and applied it to centralize power through uniform edicts and the first printed money; the resulting bureaucratic rigidity left the hierarchy unable to respond to internal corruption and to external invaders. 2021
Europe, unlike Imperial China, used the printing press to decentralize knowledge rather than to centralize power, and this different application of the same information technology produced a cultural transformation that undermined Europe's centralized powers. 2021
The unstoppable power of decentralization is threatened by unregulated competition for profits, but it can be maintained even in extreme circumstances by a secure and meaningful reputational system. 2021
Modern Western democracies, which the authors treat as the largest DAOs ever assembled, show that a network whose members hold diverse values can be united by protocol centralization, and that the destabilizing effect of that protocol centralization can be ameliorated by power decentralization through dynamic governance design. 2021
When a law is written down rigorously, specifying precisely what is acceptable and unacceptable, competition obliges people to find the most efficient behavior available inside those rules, which is typically behavior located right at the boundary of what is permissible. 2021
Centralized hierarchies have at best always failed after a few centuries and usually much sooner, and the resulting chaos leaves fertile ground for reorganizing the old order, which is what the cyclical word revolution names. 2021
Centralization is a powerful mechanism for rapidly building an efficient organization aimed at solving one specific problem, such as war in pre-unified China. 2021
The more effective a centralized architecture becomes at solving its target problem, the more rigid and unforgiving it becomes; rigid architectures are unstable and fail when met with novel challenges, so more decentralized organizations are more stable. 2021
The centralized hierarchy built by the Chinese Communist Revolution was extremely successful at the military goal it was designed for, but once the military threat was gone it failed completely at solving other important problems, producing catastrophic reforms such as the Cultural Revolution and the Great Leap Forward. 2021
The lesson the authors draw from Imperial China and Pharaonic Egypt is that decentralization of power and individual autonomy give long-term stability when the society also has unifying ideals it can believe in. 2021
Decentralized organizations naturally respond to information at the edge and are energized rather than weakened when their leaders are attacked, because decentralized rebellions are strengthened by the loss of leaders who become martyrs. 2021
When a group has more unity in its values it can tolerate less rigidity in its legal protocols, so greater value centralization permits greater protocol decentralization, which in turn produces greater long-term stability. 2021
A decentralized organization cannot be conquered by attacking it from the outside: when attacked, the group merely decentralizes further, and its members become more autonomous and more devoted to the founding principles of the organization. 2021
The Spanish strategy of capturing or killing a group's leader, which succeeded against the Aztec and Incan empires, was impossible to apply to the Apaches because they had no static, official rulers and no rigid power hierarchy to manipulate. 2021
Giving the Apaches cattle in 1917 succeeded where military force had failed because the valuable assets created a zero-sum battle over resources between lineages, generating the internal competition necessary to produce a hierarchy of power over the disbursement of resources and property. 2021
The authors accept Brafman and Beckstrom's thesis that the best way to convert a decentralized organization into a centralized one is to introduce the profit motive, since money supplies a focal point for internal competition. 2021
Bitcoin does not refute the thesis that money centralizes decentralized projects: hashing power has slowly become concentrated in mining pools until the majority of that power resides in the single country of China. 2021
Almost every blockchain project the authors are aware of is suffering under the centralizing force of competition for equity control and profit, and such projects predictably move toward centralization when unconscious of these forces. 2021
Focusing rewards on reputation rather than on immediately fungible cash encourages decentralized organization because it disperses power fairly: anyone with equivalent talent is equally acceptable, those already employed are unavailable, and the exponential rich-get-richer concentration of power is diminished. 2021
The Articles of Confederation were consciously written to limit the authority of a weak central government with no chief executive, and this made the American war effort difficult because the organization was very inefficient at marshalling resources. 2021
Democracy itself decentralizes power, but to unify a large population holding diverse values the United States relies on rigid protocol centralization from a Rule-of-Law legal system, whose statutory clarity supplies the fairness and transparency that diverse groups require. 2021
The separation of powers works because it makes each branch's power derive from the others, harnessing the natural human competitive impulse to stop any branch from usurping power not enumerated in the Constitution, which is what the checks and balances prevent. 2021
When the executive branch is given more centralizing power during a crisis, or simply takes it, the mechanism for removing that power once the threat has passed has rarely been followed. 2021
The authors stipulate that functioning democracies are decentralized autonomous organizations: the United States government is a DAO, as are Norway, Mauritius, Uruguay, and South Korea, and every functioning democracy is more akin to a DAO than to a centralized corporation. 2021
In designing governance for large global networks, protocol centralization is necessary in order to display objective fairness, yet that same protocol centralization leads to instability, which is the core design tension the chapter's historical cases are meant to resolve. 2021
Decentralized code review underwriting makes the code review market more efficient because it democratizes the functions of code review and frees untapped sources of power and knowledge. 2021
Modern philanthropic strategies entrust donors with identifying which problems need to be solved and with providing the solutions, rather than trusting the solutions proposed by the nonprofits themselves, which makes the approach more centralized and less grassroots. 2021
Distributed ledger technologies are particularly capable of increasing trust among charitable organizations, sponsors, and beneficiaries, because the technology enables real time tracking of the donation supply chain. 2021
Forum comments let existing voting associates identify the most competent commenters and invite them to apply for membership by providing work for a grant, creating constant onboarding feedback effects that cannot exist in traditional centralized charitable organizations. 2021
By giving the power of the endowment to the DAO the donor relinquishes control over the assets in exchange for community governance, and that relinquishment builds trust and community buy in, which in turn secures growth and legacy for the donor's purpose. 2021
Decentralized evolutionary and dynamic governance forms the foundation of the CHARITYxDAO community values and core beliefs, and decentralized governance is what provides cohesion and longevity in the DAO. 2021
The CHARITYxDAO's long term success depends on maintaining dynamic decentralized fluidity and order; without it the values that initially united the voting associates are at risk of morphing into ever tighter, more complex, and hierarchical structures. 2021
Just as centralized institutions rely on the vetting of candidates by other centralized institutions, the CHARITYxDAO may serve as a decentralized oracle for philanthropic endeavors. 2021
Decentralized systems create a self reinforcing feedback loop between unique individual inputs and personal freedom: as the quality of unique individual inputs improves the system, the system places higher value on the uniqueness of human inputs, and personal liberties expand as a result. 2021
Decentralism transcends both socialism and capitalism by positing that centralized coordination of societal and economic activity, in whichever doctrinal form, should be minimized in order to free human potential. 2021
Personal assets such as one's data, preferences, and opinions can only be commercialized to a limited degree in existing centralized structures, whereas decentralized structures allow those same assets to be tokenized, valued, and mobilized. 2021
Unlike their centralized predecessors, decentralized technologies enable, for the first time in history, improved incentive designs that help overcome the insufficiencies in the voting outcomes of representative democracies. 2021
The conveniences and benefits of centralized algorithmic automation carry risks to humanity that cannot be fully quantified, and decentralized systems can counteract those downsides and threats. 2021
A feedback loop exists between decentralized protection of the human factor in algorithmic systems and the proliferation of both algorithmic automation and decentralized solutions. 2021
Because decentralized platforms can remove the consumer fees that are integral to their centralized competitors, they also remove downward pressure on platform worker compensation, since costs are less likely to increase and be passed on to workers and consumers. 2021
High intermediary fees in legacy payment systems make transacting economically viable only at higher transaction volumes, thereby creating barriers to entry that decentralized payment systems do not impose. 2021
Platform centralization is especially damaging in developer communities because developers are the channel through which information from the edges of the system and society enters, and through which consensus on emerging technologies is formed. 2021
The lack of developer liberalization carries negative societal consequences: when developers are restrained from building what they see as cutting edge and socially beneficial, society's own capacity to experiment with new technology is severely hampered. 2021
The initial Casper testnet was subject to inevitable centralization, illustrated by a small group of core developers setting validator performance numbers and other rules without broader community input. 2021
Any testnet environment depends on proper governance to allocate power fairly and equitably at equilibrium in a sustainable fashion. 2021
A voting associate's SDAO reputation score is determined by that associate's merit, level of activity, and engagement in the SDAO. 2021