The cryptocurrency craze of 2017 exposed the limitations of centralized resources and information systems, and argues that blockchain technology can positively impact the direction of human development by realizing the value of decentralization.
In 2017, the world was swept up in the cryptocurrency craze. People claimed to have made billions and tens of billions of won by investing in cryptocurrencies, and many people invested in cryptocurrencies despite media reports that it was speculation. When the bubble burst, the prices of many cryptocurrencies plummeted, but the blockchain technology behind the cryptocurrency craze has the potential to fundamentally change the direction of human development. Since the dawn of time, humanity has only developed in the direction of centralizing resources and information. There have been attempts to go against this trend, but they have not become mainstream. Blockchain, however, is a technological advancement that embodies the value of decentralization. In this article, we will look at the evolution of homo sapiens towards centralization and discuss the possibilities of this technology and what decentralization means for humanity, using cryptocurrencies as a representative example of blockchain.
Homo sapiens has constantly evolved with the use of tools. In his book Sapiens, Yuval Noah Harari breaks this down into the Cognitive Revolution, the Agricultural Revolution, and the Scientific Revolution. With each revolution, humanity’s information and resources exploded and became increasingly centralized. Homo sapiens, living in herds, formed city-states, some of which grew to form vast empires. As empires collapsed and fragmented into states, they grew larger and larger over the course of history, until the 20th century, when the modern nation-state emerged. The government that governs a country is a collection of interacting institutions, each of which manages the personal information of its citizens, collects taxes, and uses them to take care of the country and its people, and interacts with other countries. In the modern world, there are not only countries, but also multinational corporations. They hold the personal data of tens of millions to billions of people and use it to operate in a variety of sectors.
In the modern world, information and resources are highly centralized and controlled and managed by a very small number of people. The information power of global corporations is enormous, with Google predicting flu pandemics before the CDC based on its users’ search data. Policies are made and new business models are created based on this wealth of information and resources. However, if left unchecked, a group with vast resources and information can descend into a kind of barbarism. A company with a lot of information can become insecure and leak personal information, executives can steal your information and sell it to other companies, or they can circumvent the law and make unethical decisions. To combat these problems, there are organizations that audit countries and global companies, and there are laws that govern how they use the information they have. However, these checks and balances can help maintain transparency, but they are not a fundamental check on centralized information and resources. The fundamental check on centralized information and resources is decentralization. Decentralization was not recognized as a check on centralization a few decades ago. This is because people didn’t trust decentralized networks.
Homo sapiens have been trading through barter for a long time, and we’ve only used money for a very short period of time in our evolutionary history. The concepts of banking and credit came much later. Despite its short history, when it comes to finance, Homo sapiens has evolved to trust centralized organizations with more capital and information because it’s thought to be more efficient and stable to manage the wealth of many people centrally. Isn’t it much more trustworthy to leave your money in a bank than to leave it in a pawnshop? Since the concept of banking and credit emerged, it has evolved in the direction of becoming more centralized and larger, never the other way around.
However, the information revolution and the emergence of blockchain technology have provided the technical basis for those who seek decentralization. The value of cryptocurrencies is still volatile and far from perfect. However, cryptocurrencies have shown that it is possible to have a currency that is not controlled by a central government or bank, but rather by the users participating in the network, where the price is controlled by the network and transactions are transparent to all participants. Blockchain technology can be used not just as a currency, but also to make information transparent in many fields, such as healthcare and law.
Decentralization also offers the value of stability. Blockchain networks are nearly impossible to hack because new blocks are constantly being added on top of existing blocks, and this history is shared by network participants. Centralized information is vulnerable to risk. If no copy of the original information exists, it is impossible to verify its authenticity if it is compromised. In this situation, multiple copies can be made to verify authenticity, and blockchain can be thought of as everyone sharing the original.
Using this technology doesn’t come with complete reliability. There have been cases where cryptocurrency exchanges have been hacked, and cryptocurrency wallets stored on a person’s PC have been hacked. Also, the General Data Protection Regulation (GDPR), which was recently proposed in Europe, is in direct conflict with blockchain. The GDPR guarantees the right to erasure of personal data, but blockchains store information in blocks and cannot be altered. While the technology is still evolving and the legal debate is ongoing, it’s clear that blockchain technology offers a new level of stability compared to traditional methods.
Homo sapiens have more resources, capital, knowledge, and information, but the more resources and information we have, the greater the gap between the haves and have-nots. Developed countries and various private organizations provide assistance to developing countries in the form of Official Development Assistance (ODA), but ODA comes in many forms and often prioritizes the interests of the donor country or institution over those of the recipient country. Blockchain technology, however, can provide opportunities for people in ways never before imagined.
South Asia, Africa, and the Middle East have low account penetration rates compared to other parts of the world. In the Middle East, many women in particular do not have access to accounts. Cryptocurrencies are enabling these unbanked people, including women, to access financial services. Without cryptocurrencies, women who would otherwise have spent their entire lives outside the economic system are being brought into the economic fold. In Africa, increasing mobile penetration is also increasing access to cryptocurrencies and fintech. Advancements in technology and increased accessibility are the catalysts for more opportunities for more people.
Science and technology are value-neutral. Whatever the outcome of technological advances, it’s not the technology that matters, but the humans who use it. In the course of our evolutionary history, we have seen self-destructive phenomena such as war and environmental pollution. Nevertheless, homo sapiens has found a way to be happy and has made remarkable achievements in biotechnology, cyborgs, artificial intelligence, and many other fields. Blockchain technology is one of the tools we’ve discovered along the way. It enables us to move beyond the centralization of capital and information and pursue the value of decentralization, opening up opportunities for more people. Homo sapiens has evolved by centralizing capital and information. The value of decentralization is not in eliminating all centralization, but in keeping centralized capital and information in check and making life better for homo sapiens.
