Decentralization is taking back control, but what does that really mean, and what ripple effects are likely to happen?
The Wild West
From the 1600s until the 1900s, you could say that people took care of themselves, their own land, and protecting their assets. When local security couldn’t use technology to track down thieves and all sorts of criminals, it was difficult to do anything to catch and arrest them. There was no other option than to take responsibility and hold yourself accountable.
In the following article, we will cover 3 System choices;
- Current Systems (Centralized)
- 100 % Decentralized Systems
- Decentralized but Regulated Systems
Controlling your own finances
Traditional banking comes with many problems, including overseeing eyes, restrictions on how, when, or even where you can get access to money. We receive fees on top for many basic transactions including global transfer, currency exchange, ATM withdrawal, Account closing, and overdraft breaches.
Charges, charges and more charges
Many of these should be minimal with modern-day technology, however, they are extremely costly, happen to millions regularly and take a lot of time to process. Not minutes, but days. There are very few processes in current life where waiting 3–5 business days is normal.
Absolute control, doesn’t that sound perfect?
We decide when we need access to our assets, what fees we are happy to pay, what we want to buy, and have a program carry out everything on average (Using Ethereum) in under 15 minutes for simple transactions. No middlemen, no unnecessary fees, and minimal waiting.
In reality, being able to do anything you need, want or desire sounds very appealing. No one with oversight getting in the way, no company analytics collecting your data, or need to ask for permission to use your assets.
Unfortunately, in 100% decentralized systems this puts us in the position, to need to fact check everything ourselves, really understand what we are doing, and, if mistakes are made, we can only blame ourselves and try to ensure the same mistake doesn’t happen again.
In current systems, if we make a purchase for something, people online with access to our accounts can see. If you think about it, not everything everyone does is savory. We all have a thing or two we would want to keep to ourselves. Maybe you told your wife you quit smoking, so you wouldn’t want that information to leak out somehow. Or for Jill at the bank, who might be a family friend, to let it slip that she noticed you paid for or subscribed to exactly what you shouldn’t have.
Trusting people comes with problems. When we trust any third-party company, we trust people. We give them access to some of our innermost personal actions and thoughts.
Giving away control comes with problems. But taking control isn’t rainbows and butterflies either.
Some problems in 100% decentralized Systems ;
If we lose our password to our digital bank (No one can help you get access)
If we make a mistake in a money transfer and send it to the wrong address, it’s gone (Unless the person is kind enough to return without any law to enforce them)
If we misread and confirm something, after confirmation there is no going back (Eg buying a toy house rather than a real one for X Amount)
We must hold ourselves fully accountable
With Blockchain and Cryptocurrency, we can bank, transact, and do anything we want online. Suddenly the world opens up, with anyone using a cryptocurrency being able to interact and connect quickly, and cheaply, globally. But it is difficult to imagine a 100% Decentralized economy as being the best option.
This is where things get a bit blurry for regulation and ultimately, giving people real control.
Look around you, there are people. It doesn’t matter if you come from a small village, megacity or live in the mountains. You will come across people and it cant be avoided.
For a lot of people, we would hope that staying safe, and not causing harm to others would be high on a list of what is right and what is wrong. But if Blockchain and 100% fully decentralized systems really took over, we could lose a lot of power to control bad people accessing and performing bad things.
The Silk Road was famous in the crypto world, it was an Amazon for buyers using cryptocurrency. However, this amazon had everything for sale including;
If someone had access to it and wanted to sell, they could do so. The power that comes with this access, is truly decentralized. No one can stop you from buying a gun, drugs, famous stolen art, or whatever you desire. In this exact case (2011), people didn’t actually understand blockchain, and that it is very easy to track users, if, they don’t know how to use more advanced features to cover their tracks.
Freedom certainly can be said for this, but we live in a crazy world, and does everyone have the right to all freedoms?
The need for Regulated Decentralization
In a world where everyone can make mistakes, It is important to factor this into all forms of life, digital or otherwise.
Forgetting passwords, not fully understanding everything, and giving a third-party some information to make life easier, is a needed element for many people. There is always risk involved in giving information to unknown people, but, If we have a mix of decentralization and regulation, we can enjoy a safer environment, with less control and permissions given, while keeping people free of being 100% accountable for all of their actions.
It would be quite a difficult world if we forgot a password to our life savings, and there was no answer or solution to access. So we need some middle ground.