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Why is decentralization important?

Why first two eras of the Internet

In the first era of the early Internet (Web 1.0 from the 1980s to the beginning of the 21st century), Internet services were built on open protocols controlled by the Internet community. This means that people or organizations can increase their Internet presence without having to worry about the rules of the game being changed. This era has produced many Internet giants including Yahoo, Google, Amazon, Facebook, LinkedIn and YouTube. In the process, the importance of a centralized platform like AOL (America Online Online’s famous Internet service provider) has been greatly reduced.

In the 2.0 era of the Internet, from the beginning of the 21st century to the present, the most famous of the profitable technology companies are GAFA (Google, Apple, Facebook, Amazon), which build software and services far beyond the capabilities of open protocols. The explosive growth of smartphones has accelerated this trend, and mobile apps have become the mainstream of Internet applications. End users migrate from open services to Why  more sophisticated centralized services. Even though users still use the Internet through open protocols, most of their software and services are controlled by the four Internet giants GAFA.

The benefit is that countless people can experience advanced technology and many applications are free. But for start-ups, entrepreneurs and other organizations, it may be a bad news. They want to get a piece of the Internet industry. It’s hard to worry about the centralization platform that will change the rules of the game and take away potential users and profits. This in turn inhibits innovation and makes the Internet no longer interesting and active. Centralized systems have also created more widespread social tensions, including false news, official robots, “no platform” for users, EU privacy laws and algorithmic biases, and so on. These arguments will only intensify in the coming years.

Web 3 – The third era of the Internet

One of the measures to deal with centralization is to strengthen government supervision of large Internet companies. The premise of this response is that the Internet is completely similar to the past communication networks (telephone, radio and Why networks). But in fact, the past hardware-based networks are fundamentally different from today’s software-based networks. Once a hardware-based communication network is established, it is almost impossible to re-architect, and a software-based network can be re-architected through enterprise innovation and market forces.

The Internet is a completely software-based network consisting of a relatively simple core layer and billions of fully programmable computer connections. Software is just a coding of human thinking and thus has almost unlimited design space. A computer connected to the Internet can run almost any software freely. No matter what you think, with the right incentives, you can spread quickly through the Internet. The Internet architecture is the Garden of Eden where technological innovation and whimsy collide.

The Internet is still in its infancy: Internet core services are likely to be disruptively rebuilt in the coming decades. This will be achieved through an encrypted economic network, a concept originally derived from Bitcoin, which was further developed by Ethereum. Encrypted network technology combines the best features of the first two eras of Why Internet: a community-managed, decentralized network, and this new network will eventually surpass the most advanced centralized network services available today.

Why do you want to centralize?

The decentralization of the Internet is a concept that is generally misunderstood by the public. For example, there is occasional remark that the encryption network advocates support for decentralization in order to resist the government’s censorship or a liberal political view. And these are not the main reasons.

Let’s first take a look at the problems faced by the centralized platform. This platform follows a predictable life cycle. Once started, they will do their best to recruit users and third-party personnel, such as developers, businesses and media organizations. Doing so can make their services more valuable because the platform (by definition) is a system with a multilateral network effect. As the influence of the platform continues to increase along the S-curve, its control over users and third parties is gradually increasing.

When the influence of the platform develops to the top of the S-curve, their relationship with the network participants changes from a non-zero sum game to a zero-sum game. The easiest way to keep the platform growing is to extract data from users and grab users and profits with third parties. Typical examples in history are: Microsoft and Netscape, Why and Yelp, Facebook and Zynga, and Twitter and its third-party clients. Although operating systems like iOS and Android perform much better, they also charge third-party developers a 30% commission, or refusal to apply for ridiculous reasons, or arbitrarily merge third-party applications.

For third parties, this shift from cooperation to competition is like a trap. Over time, top entrepreneurs, developers and investors have begun to take a wait-and-see attitude towards building their own networks on a centralized platform. The evidence available for decades has already shown that the centralized network will end in disappointment and withdraw from the historical arena. In addition, users who give up privacy and give up control of data are vulnerable to security breaches. In the future, these problems brought about by the centralized platform will become more apparent.

Entering the era of encrypted networks

An encrypted network is a network built on top of the Internet: first, it uses a consensus mechanism such as blockchain to maintain and update state; second, encrypted networks use cryptocurrencies (such as coins/tokens) to motivate consensus participants (eg Miners / certifiers) and other network participants. An encrypted network like Ethereum is a general-purpose programming platform that can be developed for almost any application. Other encrypted networks have special uses, such as Bitcoin for storing values, Golem for computing, and Filecoin for distributed file storage.

Early Internet protocols were actually a collection of technical rules created by work teams or non-profit organizations that benefited in a coordinated and win-win environment in the Internet community. This approach worked well in the earliest stages of the Internet, but since the early 1990s, there have been few new protocols that have become popular. Encrypted data networks can solve these problems and provide economic incentives to developers, maintainers, and other network participants in the form of tokens. Encrypted networks are also technically more powerful. For example, they can maintain a state and arbitrarily convert that state, something that was not possible with past protocols.

Encrypted networks use a variety of mechanisms to ensure they remain neutral as they grow, preventing the trapping of the central platform. First, the contract between the encrypted network and their participants is executed in open source code. Second, they check through the “voice” and “exit” mechanisms. Participants gain a voice through community governance, including “on chain” (through agreement) and “off chain” (through social structures around the agreement).

At the same time, participants can also leave the network and sell their currency to withdraw completely or, in extreme cases, exit through a distribution agreement.In short, the Encrypted Network Joint Network participants are committed to achieving a common goal – the development of the network and the value added of tokens. This consistency is one of the main reasons why Bitcoin can ignore doubts and continue to prosper, and new networks of encryption technologies such as Ethereum have also evolved.

Nowadays, the development of encrypted networks is being greatly restricted, which seriously hinders their efforts to challenge the centralization authority. The most serious of these is the performance and scalability limitations surrounding encrypted networks. The development of encrypted networks in the next few years will primarily address these limitations and build networks that will become the infrastructure layer of future cryptographic protocol stacks. After that, the main force of the encrypted network will turn to research on how to develop applications on such infrastructure.

Decentralized advantage

Discussing the decentralized Internet will occupy the market on the one hand, and how to occupy is another aspect. The specific reasons will be explained below.Software and web services are built by developers. There are millions of advanced developers in the world. But only a small percentage of them work in large technology companies, and only a small percentage of these people focus on new product development. Many of the most important software projects in history have been created by startups or independent developer communities.”No matter who you are, most of the smartest people will work for others.” – Bill JoyThe decentralized network will eventually win the third era of the Internet, which is the same reason that it won the era of web 1.0: winning the hearts of entrepreneurs and developers.

At the beginning of the 21st century, the competition between Wikipedia and rivals such as Encarta was a good example. At that time, if you compare these two products, you will find Encarta theme coverage will be wider, more accurate, compared to a better product. But Wikipedia is improving faster because it has an active volunteer contributor community that is attracted to this decentralized, community-management spirit. By 2005, Wikipedia had become the most popular reference tool on the Internet. Encarta closed down in 2009.From this Why conclude the lesson: When comparing centralized and decentralized systems, they need to be seen as dynamic processes rather than static, rigid products. The centralized system is usually complete and fully functional at the time of launch, but its speed of improvement depends entirely on the employees of the company.

Decentralized systems are not perfect at first, but under the right conditions, they attract new contributors and the growth rate is multiplied.There are multi-party composite feedback loops in the encrypted network, including core protocol developers, developers of complementary encryption networks, developers of third-party applications, and service providers of operating networks. These feedback loops are further amplified by the incentives of the relevant tokens, as we have seen in Bitcoin and Ethereum, which can speed up the development of the encryption community (but sometimes lead to negative results, like digging bitcoin causing a lot of power consumption) .Whether the decentralized or centralized system can win the next era of the Internet, the most critical issue is who will build the most attractive products, that is, who can attract more high-quality developers and entrepreneurs.

The GAFA four companies have many advantages, including cash reserves, a large user base and operational infrastructure. Encrypted networks are more attractive to developers and entrepreneurs in terms of value proposition. If encrypted networks can win their favor, they can mobilize more resources than GAFA and quickly surpass GAFA’s product development.If you ask people in 1989 what they need to improve their lives, they can’t say a decentralized network that uses hypertext links to access information nodes. — Farmer & FarmerCentralized platforms typically bundle when they launch an app: Facebook has its core social features, and the iPhone has many key applications. In contrast, decentralized platforms often introduce cases that are not yet complete and have no clear purpose.

Therefore, they need to go through two phases of product-market adaptation: 1) product-market matching between platform and developer/entrepreneur, they will work together to build the platform and build the ecosystem; 2) platform/ecosystem and End user’s product – market match. This two phases will cause many people (Why some experienced technicians) to underestimate the potential of the decentralized platform.The next era of the InternetDecentralized networks are not a panacea for all problems on the Internet. But they do provide a better solution than a centralized system.We can compare spam tweets and spam issues. Since Twitter closed the third-party developer’s network, the only company that can research Twitter spam tweets is Twitter itself.

In contrast, hundreds of companies are trying to overcome the spam problem of filtering spam through billions of dollars in venture capital and corporate finance. Although the spam problem has not been fully resolved, the situation is much better now, because third parties already know that email protocols are decentralized, and they can build businesses on this basis without worrying about whether the game rules will change later. .Or you can consider the issue of network governance. Currently, determining how information is sorted and filtered is often the irresponsible employees on the big platform, including which users can upgrade, which users should be banned, and other major governance decisions. In an encrypted network, these decisions are made by the community, applying a fully open and transparent mechanism.

Just like our offline real world, democracy is not perfect, but it is much more suitable than other options.The centralized platform has always dominated, so that people have forgotten a better way to build Internet services. Encrypted Why are a powerful way to develop community-oriented systems, and they provide a level playing field for third-party developers, entrepreneurs, and businesses. In the Internet 1.0 era, we saw the value of decentralized systems. I hope that in the next era of the Internet, we will meet it again.

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