Part 6: The Decentralization Movement
When Naval wrote his piece on the fifth protocol he emphasised cryptocurrencies as likely candidates for this layer. Although he may have been early, and perhaps a bit naive about the tech’s maturity and scalability, the blockchain community has truly developed into the most outspoken and passionate proponents of decentralization.
Great thinkers and polemicists like Vitalik Buterin, Michael Saylor and Robert Breedlove have attracted a great audience and following, but have focused their rhetoric almost exclusively on the importance of decentralizing the power over the monetary system.
Today, most cryptocurrency projects with any kind of material product traction (as opposed to traction with speculators) focus on decentralized finance, with use cases like international transfer, peer to peer lending, tradable derivates and unregulated securities dominating the charts and blockchain community mindshare.
But the greater blockchain movement is still in its infancy. For all its evangelizing efforts, the community is still comparatively small and lopsided: anyone that has spent time in the trenches of the blockchain industry will tell you that there are many more bankers and marketers in the space than actual engineers.
We believe one of the unfortunate results of this focus on (unregulated) finance is the crowd that it has attracted. The staggering amount of fraud and dead-end projects we see today is exactly what you’d expect when you attract bankers and marketers instead of builders and innovators.
The bull run of 2021 was a truly historic moment, with unprecedented amounts of capital going towards funding the development of the metaverse.
The decentralized financial infrastructure built by the early adopters of blockchain had created the opportunity for the people to democratically fund a vision they were excited about.
It was a movement and reallocation of capital unlike any seen in our lifetime, but a lot of it ended up misallocated. There were not enough builders in the space to capture this enormous influx of capital, so bad actors organized to market understaffed projects to the public - even going so far as funding the creation of entirely fictitious projects.
And so, the great triumphs of decentralized engineering have been overshadowed, in the public imagination and awareness, by the abusive people that they enabled. The space needs more builders.
A sobering comparison is that individual companies like Meta, Microsoft or Apple have more engineers than the entire blockchain space combined. In recent layoffs, Meta fired more engineers than there were monthly contributors to web3 at the height of the 2021 bull run.
It seems like the promise of decentralizing the monetary system, or owning digital goods, attracts many more speculators than builders.
This is not to say that extraordinary things have not been accomplished by some of these outnumbered blockchain engineers, but the disparity of resources between the tech giants that seek to own the infrastructure of the future of language and the champions of decentralization and equitable participation is not encouraging. The decentralization movement needs to rally around solving more pressing issues, to attract more great innovators and builders. It’s not enough to attract capital - the decentralization movement needs more human resources.
Besides - how certain are we that the concept of money will survive unscathed in the AI era? A great irony of the orange pill movement is that money could cease to be meaningful long before it ever gets decentralized.
The decentralization movement should instead focus its efforts on the advent of AI and spatial computing. Here, the stakes extend beyond economic frameworks to the very essence of human autonomy and cognitive freedom. The tech giants’ growing control over how we perceive and interact with our world calls for an urgent redirection of the decentralization movement’s focus.
The fifth protocol could have a bright future as the companion to the sixth, enabling collaborative and decentralized reasoning about space at the speed of machine thought. Such a vision would surely attract more builders, and move the needle away from the dystopian excesses of surveillance capitalism.
The economic opportunity and the creativity and productivity gains promised by the intersection of generative AI, spatial computing and shared augmented reality are difficult to overstate, but there are commensurate technological and organizational challenges that must be overcome.
If we want this powerful technology to aid us in our day-to-day life we must extend the digital twin beyond our roads and public places, into the private and sovereign domains of our homes and businesses.
From a practical point of view, this will require many times more sensors than there are homes and businesses, and the various observations and maps generated by the sensors have to be reconciled into a coherent and navigable dimension of spatial information.
Perhaps we will all volunteer our spatial data to Jeff, Elon and Mark eventually, but we are not yet willing collaborators. There are still ways that the people can get back in the driver’s seat and wrest control back from big tech.
Leaders from the decentralization movement and crypto space mounted a counter-offensive at the World Economic Forum in early 2024, putting forward a convincing argument that decentralized physical infrastructure networks (DePIN) are key to curtailing the cancerous growth of big tech.
Just as the invention of cavalry (and recently drones) changed how wars are fought, decentralized networks offer new opportunities for collaboration and market forces to outperform tech oligopolies. Like Airbnb and Uber increased the utilization rate of homes and cars, decentralized physical infrastructure networks increase the utilization rate of computers and sensors in fair and equitable ways.
DePIN networks can outcompete prevailing cloud architectures in many ways, both in terms of performance and cost, but can also stop data from aggregating in the hands of one company.
With the rising interest in DePIN, the decentralization movement is coming to the realization that Satoshi’s true legacy is letting the people and the free market own and maintain infrastructure crucial for civilization, challenging the hegemony of profit-driven corporations.
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