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Decentralization is a Red Herring

The crypto world is agog over Web3’s promise to atomize the internet. This is a ruse and should be approached as such.

Centralization is immutable. We see this throughout world history. Empires have always battled over who should flex economic and political power. The United States itself was founded in 1776 on the basis of decentralizing power out of one monopoly. Yet, even in that formation there is still centralization in its three branches.

This is not necessarily a bad thing.

Yes, too much centralization is definitely bad, and, yes, Web3 will be more decentralized than Web2. But the promise of the future digital landscape being completely decentralized is not going to happen.

It is true that the internet is not ‘owned’ by any one person or entity; nonetheless, Google, Amazon, Facebook and others have found ways to monetize siloed assets in Web2. These and other corporations will find ways to centralize assets in Web3.

Just think about what a DAO (decentralized autonomous organization) is: it’s decentralized and autonomous yet it is also organized.

Why will Web3 still be centralized?

Because people will always have to work together.

If you are selling, you are sharing. If you are sharing then you are in a centralized community of some degree. I am not trying to overstate this here, but there has got to be some pushback to the tidal wave of excitement that centralization will cease to exist in Web3.

Shareholders and VC’s will always have a stake in their companies which will always outweigh anyone else’s share outside of the boardroom. There will always be a sales platform which has the broad reach that a creator does not.

Perhaps a purist will argue that those platforms should not be used. Well, then your content, product or service will not be seen by enough people.

We already see this happening with companies such as OpenSea and Coinbase as well as several burgeoning dApp ecosystems. Digital sales platforms will always take a cut from the creators they promote. (OpenSea takes 2.5% off every sale.)

Where the focus should be

By giving up the idea that decentralization will be omnipotent, we can better focus our energies and knowledge upon where Web3 can truly improve people’s lives in many, many areas. There is a lot of potential.

Smart contracts offer the world a far more streamlined operation of how business can be conducted, by cutting out middle-men and disclosing records. Even more to the point, they allow for the creation of new economies.

Cryptocurrencies can be great for developing nations because they do not rely upon the social trust of a fiat currency’s value from day to day. Coin traceability and transaction verification will do wonders to improve these economies.

Investment and new companies will have a plethora of new opportunities to engage with. New business models are coming and with them will come new ideas about how to operate on the blockchain.


Yes, Web3 computing will be essentially decentralized since it literally is the blockchain. But digital markets, trade, investment and new companies who provide goods and service on the blockchain will have their own centralization by necessity. If they didn’t then they couldn’t operate.

With a focus on the value of smart contracts, the elimination of middle-men, cryptocurrencies being available in developing countries and more, Web3 will provide its greatest value.

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