Phase 3 of "Ben reads about Blockchain so you don't have to": why are a number of prominent VCs so bullish about blockchain? What are they seeing that you're not? Stay tuned. Starting with @cdixon's "Why Decentralization Matters" -- medium.com/@cdixon/why-de…
2/ so I think @cdixon's main point is: the Internet was a decentralized platform in its early days, and that was awesome for developers. Then we got centralization w/ GOOG, AMZN, FB, AAPL, and blockchain tech like Ethereum will return us to the awesomeness of decentralization.
3/ he sees tokens, which are new currencies created on Ethereum for specific products/applications, as a means to align economic incentives of all participants: everyone wants the token to increase in value. Thus, cooperation wins instead of platforms extracting value from users.
4/ OK, now to my opinion. This last point, that tokens create alignment of economic incentives... while it seems far-fetched to me, maybe this alignment outlives the initial speculative bubble? Maybe a brand new means of incentivizing long-term collaboration has been created?
5/ that said, I have serious beefs with much of the rest of the post, so I'm not quite sure any of this brave new token world matters.
6/ first, let's talk decentralization. The amazing generative power of the web was indeed due to decentralization. Specifically, anyone could put up a web site that sells books or lets you search the web, without asking for permission from a central authority.
7/ critically, though, the success of online services is due to the ability of those service providers to rapidly change/adapt their service to user need, also without asking anyone for permission. Amazon added one-click. Google created adwords, Facebook added newsfeed.
8/ the decentralization of tokens/blockchains is very different. Once a contract is published, once a token is issued, it can only be used in the way that was originally defined or that a quorum of token holders will allow. That's inherent to the economic alignment argument.
9/ in other words, the inherently-hard-to-iterate nature of tokens is precisely the opposite of what made the web so powerful in the first place. You have to be careful throwing around the word "decentralized." It doesn't always mean the same thing.
10/ there are more flaws. Chris compares email spam filtering (decentralized and good) vs. Twitter spam filtering (centralized and bad).... Except email spam filtering got really good only once Gmail used a large portion of the world's email as a training set.
11/ Remember IMAP? I loved IMAP. I ran my own IMAP server in 1996, so much better than POP for managing your email inbox from multiple clients. IMAP was also a fixed protocol. Pretty hard to add entirely new features in a distributed system. And then webmail crushed it.
12/ I have trouble seeing how blockchain/tokens are different from the IMAP model. You have to lock in your protocol and then get quorum to change it
13/ Ultimately, I agree with Chris that this all boils down to "who will build the most compelling products, which in turn reduces to who will get more high quality developers and entrepreneurs on their side." I have yet to figure out why developers would prefer blockchain.
14/ I'll keep reading more to try to understand what I'm missing. If my tweeps have any suggested reading, I'm all ears.
