Cryptocurrencies

You’re not ready for Decentralisation

You think you are, but you aren’t.

I’m a really clever guy, but even I’m probably not ready for it. Why not?

The problem is our oldest enemy: ourselves.

Being creatures of habit / sheep with a herd mentality – us humans struggle against our biases every time we try to go against the grain and think out of the box. As if it isn’t bad enough that we have to fight the collective opinion of 7 billion other people, we also have to fight ourselves.

You are biased. You’re probably very VERY  biased. Only a small and exclusive group of people even realise this, let alone attempt to counteract it.

If you doubt what I say, then perhaps you need evidence. I’m not going to mess around with that, I’ve dealt with this in the past. Here you go: https://steemit.com/cryptocurrency/@bitbrain/i-m-realistic-about-the-crypto-market-you-aren-t – come ask me if you have any more questions after you have read it.

The Hypothesis:

The hypothesis is that we have been conditioned to associate trust with a personality. The standard theory is that “decentralisation” is far better and more trustworthy than any personality. It’s unbiased and, by definition, works in the common interest.

Yet in practice – we don’t seem to care. Even in the crypto community.

In the crypto community we are caught up in our old ways. We follow trusted personalities – much as we follow trusted brands in our everyday lives. You know: ”I only buy Honda cars because they are reliable” or “I’ve just arrived in this country for the first time – let’s head to McDonald’s for a snack because I’m familiar with that brand”.

There’s nothing wrong with that, it’s a strategy which has worked well for us in the past, I’ve certainly done it many times. But crypto doesn’t really work that way. Decentralisation doesn’t require the trusted brand identity of a central figure.

The Evidence:

Take a look at this Top 10 market cap list from coinmarketcap.com: (Tether does’t count so I’m going down to coin #11)

Now look at it again:

Do you know those names? 

You should. Those are the personalities driving each of those respective coins. Those are the brand ambassadors. 

Those are the people whom the masses (us) trust more than the principle of decentralisation. Those are the people we follow and the people who we choose to invest in. What hypocrites we are!

If Dan wasn’t behind your precious EOS, would you still invest? If Vitalik died tonight, what do you think would happen to the price of your hoarded Ether stack tomorrow? If CZ left Binance and joined KuCoin, how would the relative coin prices of Binance Coin and KuCoin Shares suddenly change?

I’m right. You know I am.

Want further evidence? Here you go:  

https://coinmarketcap.com

Visit that link and name the people behind the next ten coins on the list. I could only name 3.5 of the next 10, yet the first top 10 were all easy for me to name. You’re probably in a similar situation. 

Go further down the list, name the people behind coins 21 – 30. Now it’s really getting tricky!

“But Bit Brain, we know these people because their coins are at the top”. No. You don’t. You know these people because they are actively promoting their coins (or are extremely well known in the case of Nakamoto). Because you are conditioned to a world where advertising is king. You are primed to be susceptible to mass manipulation and you assume that if a coin is not playing that game, well then it is too lazy or too incompetent and you become wary of investing in it, probably subconsciuously.

What’s wrong with NEM sitting in position 21? Or Waves in position 28? Or Icon down in position 39? Do you seriously believe that Cardano in position 10 is a better platform than any of those three? I don’t.

Discussion:

Over time we can only hope that the better technology will prove itself, but for now it seems as if the bold personalities rule the roost. Tron is frequently targeted (sometimes unfairly) for its weaknesses, but Justin Sun has a social media presence larger than many celebrities and his coin is succeeding because of it.

My feelings on Ripple are well known, and they’re most certainly not complimentary. Ripple does decentralisation about as well as the Fed does it, yet it’s sitting at number 3 – riding high on the euphoria of a Jed McCaleb created coin which under the leadership of Brad Garlinghouse is making its name synonymous with the word “banks”. Apparently that’s what people really want!

Binance took some heat last week when CZ spoke out against Craig Wright – delisting BSV from Binance and encouraging other platforms to do the same. Yet the price rose well, really well (albeit that this was due to some exciting Binance DEX related news). 

The crypto community is speaking, and what it is saying is this: “we’re okay with centralisation”.

Centralisation is the future of crypto?

No.

An here is where things get important and I break out that unique Bit Brain insight as only I can – so listen carefully:

Decentralisation is not the best way

It’s inefficient and slower (because consensus must somehow be achieved). It results in sub-optimal compromise solutions which attempt to please everybody – remembering that “everybody” includes sociopaths, politicians and people with the IQ of a tree. The classical representative democracy model (on which most Western countries run their governments) shows the many flaws of giving “everyone a say”. Such systems are incredibly susceptible to media influence, are abused by those in power, seldom result in optimum solutions and are responsible for more travesties of justice and crimes against humanity than the publicly vilified systems of communism ever were.

The best system is one where an organisation/country/crypto/whatever is one where a community is led by a benevolent savant with practically unlimited power. The benevolent nature of such a leader means that everyone’s concerns are taken into account and that nobody is forgotten. The savant abilities ensure that optimal solutions are found rapidly and that the future is taken into account when decisions are made. The unlimited power removes barriers to achieving the goals of the leader – so solutions can be implemented immediately.

We’ve had such systems before, or at least something like them. Any nation which has ever been led by a good King, Queen, Emperor, etc would be a good example – perhaps someone like the Biblical Kings David or Solomon, or someone like the (probably) fictional King Arthur. 

Sadly the benevolent and powerful savant leader system has a major Achilles heel, one so severe that it makes the system not worth fighting to implement. That problem is continuity. A very lucky monarch may get to reign for 50 years if they start fairly young and have a typical modern lifespan. Eventually they will die and somebody else will take power. Unless we make rapid advances in our cloning, government and legal frameworks, there is a very good chance that whoever takes power next will be missing a few crucial traits, or have a few undesirable traits of their own. Even if it takes a few generations, it’s really only a matter of time before power ends up in the hands of a tyrant. In reality, anyone less than a benevolent savant will eventually cuase sufficient decay for the system to breakdown.

For this reason decentralisation is critical, at least within the limitations of current technology. Maybe one day we could resurrect King Solomon with a Jurassic Park style method and modify his cells so that they never age – but for now we’re stuck with finding a way to deal with one another fairly – probably by using decentralised consensus mechanisms like those provided by blockchains.

Does that mean that CZ was wrong to make a unilateral decision to challenge and punish Wright? Should he rather have first used an opinion poll or something like that?

That wasn’t necessary. You see, CZ IS a benevolent, all powerful savant – at least within the crypto world. Within limits, you could argue the same thing for any of those names seen in the modified CMC top ten list above, even though some are not so wise and some are not so brilliant. Those limits are determined by US, you and I. We decide how much power CZ has, or Buterin , or Larimer. Our support of them indicates our acceptance of them. When the price of BNB continues to rise, it’s an indication to CZ that he is doing the will of the people – and he is doing that. Other exchanges did hold polls about delisting Wright’s BSV, most notably Kraken. The community voted overwhelmingly in favour of delisting, thereby indicating that what CZ did was in accordance with the will of the community.

I have no problem with what CZ did, none whatsoever. In fact I’m grateful to him for standing up to a threat against our community and for acting rapidly and decisively in our defence. I’m happy with this benevolent leader and I’ve certainly been buying BNB to indicate this happiness!

For me the danger would lie in the future, a future where one day CZ no longer leads Binance. But CZ is a really smart guy and his platform is already moving in the right direction (launching Binance chain and the Binance DEX). Binance DEX may not be a perfect DEX, but it’s going to be the best one we have, at least for the time being (no disrespect intended to the few smaller DEXs already operating). Until Nash is fully launched it will have no equal.

So far I’m happy with the rate of crypto decentralisation. You can’t expect any project to be decentralised from day one, that’s totally unrealistic. We all know the many benefits of decentralisation and that that is where our endpoint lies. Crypto will continue to move in that direction, just you watch. Centralised coins will eventually fall out of favour with their users when those users finally open their eyes. Similarly, any coin with a semi-centralised following whose leader does suddenly turn “bad”, will be deserted and will suffer – once again look to BSV for a good recent example.

In effect this is also a democratic system, but it’s the right kind of democracy – a direct democracy. It’s an electronic direct democracy, a democracy in which your vote does count. It’s one where you really do get to have a meaningful say in your future. There is no middle man political representative to backstab you and to sell you out in pursuit of his or her own agenda. I told you that this was coming a year ago (“The details of a Blockchain-based Electronic Direct Democracy”), though it still has a long way to go before being properly developed and implemented. You don’t see it here because I’m not a political blogger (thank goodness!), but I continue to refine this idea on a daily basis and I am campaigning elsewhere for the adoption of systems that will eventually lead to something like my proposed BEDD system being implemented.

Conclusion:

What’s my point? I don’t have one specific point which I am trying to drive home today. This is not me telling you: “XYZ should be so”, this is me sharing knowledge and ideas so that you can know more about the world around you and how it works. 

This post isn’t supposed to be for or against any coin or individual: I’m not here to call BSV evil or to hail CZ as a crypto messiah. I’m not here to say you should invest in lots of little rubbish cryptos which have no big personality driving them. Let me do my best to summarise this article:

Crypto is inherently decentralised by design – but we aren’t. Centralised leadership is good as long as it is by the right people. Decentralised leadership is better and safer in the long-run. While the crypto community supports decentralisation, at least in principle, it also supports responsible centralised leadership through a prototype Electronic Direct Democracy – a system which will hopefully be used extensively once it is refined and run on blockchains.

Giving credit where due section:

The inspiration for this article came from a video by Suppoman (yes I still check on the old YouTube crypto shillers now and then ?) where he spoke about cryptos needing a person to drive each coin in order for it to succeed.

I hope you all had a happy Easter and I wish you all the best for the rest of the week.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”

~ John Maynard Keynes

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