Social Decentralization - The Daily Gwei #519
It matters more than anything.
People in crypto tend to over-optimize for technical decentralization while completely forgetting about social decentralization. This is utterly bizarre to me since I believe that the social layer is the most important thing to get right in crypto. I mean, if an ecosystem doesn’t have a healthy social layer that cares deeply about decentralization, then it doesn’t matter how “good” its technology is - it will inevitably centralize.
Think about the above like this - if no one cares about decentralization at the social layer then the technical layer will be built to reflect that. For example, an ecosystem that does not have a culture of encouraging people to run their own nodes (and, more importantly, making it easy for them to do so) will inevitably centralize into the hands of the very few because everyone is just apathetic. We’ve seen this play out time and time again in crypto and it just ultimately leads to apathy at the social layer which obviously doesn’t make for a good decentralized ecosystem!
Some examples of social decentralization from the Ethereum ecosystem include the multi-client architecture and the layer 2 ecosystem. Ethereum has over 10 production-grade clients that people can use across the execution and consensus layers and this didn’t just happen overnight - it happened because the Ethereum social layer values decentralization above all else. On top of this, by prioritizing decentralization at layer 1, the Ethereum ecosystem has allowed a robust set of layer 2’s to blossom on top of it which all compete with each-other (as I wrote about last week here).
Finally, a strong social layer that values decentralization is also extremely important to thwart any attacks against a network - whether it be governance attacks, nation state attacks or attempts at censorship. It’s not just thwarting the attacks either - it’s also recovering from them - and a weak social layer will find it extremely hard to recover from any attacks no matter how “decentralized” the technical layer may claim to be.
I really wish more people understood and valued the importance of social decentralization and by extension, a strong social layer. Crypto-networks are held together by people first and foremost - we are the ones that run all the infrastructure after all. We then extend this social layer to the technical one and create the incentives for people to act honestly on these networks - it’s quite a marvel of engineering if you ask me!
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.