In the wake of the FTX collapse, the concept of decentralization, central to the ethos of Web3, has found itself under the microscope. Although the idea of full decentralization is enticing, it is a goal that may never be entirely achievable in reality. The definition of decentralization differs in the crypto world, where Web3 aims to give control back to the majority.
Removing intermediaries from transactions sounds appealing, but the criteria for becoming decentralized extend far beyond launching a decentralized autonomous organization (DAO) or storing data with a decentralized service provider. Regardless of intentions, decentralization often falls into a gray area, as it’s a spectrum rather than a binary feature. Projects can indeed be more or less decentralized but rarely, if ever, are entirely so.
Initially, the emergence of Bitcoin was due to the failure of centralized banking, and since then, decentralization has continued to be the cornerstone of the crypto space. Many projects have adopted the DAO framework as a means to show that decisions are reached by consensus; however, no point definitively marks a project as “decentralized.”
While a completely decentralized approach may not be feasible, projects should strive to skew more towards a greater level of decentralization. Achieving this requires focusing on process efficiency improvement, in addition to eliminating intermediaries and central points of failure. Utilizing decentralized storage providers and prioritizing community involvement are two crucial elements that can push projects closer to the goal of decentralization.
Although reaching full decentralization may prove challenging, the pursuit remains integral to the development of Web3. Projects must consider decentralization as a spectrum to further both progress and efficiency. The key is to acknowledge and accept the nuances of decentralization rather than treating it as a zero-sum game. By understanding and embracing this perspective, the crypto community can strike a delicate balance while moving forward within the constantly evolving world of blockchain technology.
Source: Blockworks
