Coleman McCormick

Archive of posts with tag 'Decentralization'

February 9, 2024 • #

Freedom to exit →

Gordon Brander on credible exit.

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Against Centralized Power

August 30, 2023 • #

From Tom Sowell’s masterpiece, A Conflict of Visions:

While Hayek regarded some advocates of social justice as cynically aware that they were really engaged in a concentration of power, the greater danger he saw in those sincerely promoting the concept with a zeal which unconsciously prepares the way for others—totalitarians—to step in after the undermining of ideological, political, and legal barriers to government power makes their task easier.

This is one of the key dangers of centralizing power, and why I’m always interested in how people pursue goals versus what specifically they’re after. If, to achieve your objective, you have to bash down existing separations of power to get the work done, you have to be prepared for a successor (with whom you don’t agree) to deploy the same overconcentration of power to pursue ends you dislike. If you approve of presidential executive orders and the executive branch overriding legislative controls to “get things done”, you shouldn’t be surprised when your enemy does the same in the next term. But it’s less important whether you feel bad about or disagree strongly with a successor using the hammer. The lesson is to avoid centralizing authority as much as possible.

Scales of justice

A system designed with constraining barriers — like the American system of checks and balances — optimizes for something many people don’t realize. It’s not about enabling us to pursue maximum upside at all costs. Bureacracy is meant to slow things down, sometimes idealistic ends take decades. It’s about limiting catastrophic downsides: the tyranny of the majority, the slide into totalitarianism.

Sowell’s constrained vs. unconstrained vision model describes a framework for thinking about how certain psychologies will approach a problem solving or policy decision. The “constrained” has just that, a constrained view of what’s possible — of the innate intractability of the universe, of human fallibility. An environment defined by trade-offs. The “unconstrained” sees trade-offs as in our way, things to be disposed of or ignored to pursue our optimal path. Limited appreciation for the fact that we have no idea if what we think is optimal is actually so.

Constrained = seek first to explain the encountered Chesterton Fence.

Unconstrained = get annoyed by said fence, declare it an irritating obstruction, bulldoze.

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Centralization is Inevitable →

June 28, 2022 • #

The tension between centralized and decentralized network design is a common theme in network science. Even a “decentralized” system is actually a continuum, not a fixed state. A system moves along an axis degree of distributedness, and depending on its purpose, there’s not one ideal state. Here Gordon Brander writes about the tendency of networks to evolve, beginning as decentralized ecosystems, evolving through stages of consolidation, then collapsing back apart into discrete connected parts.

Here is a map of the internet. The first thing you might notice is that the internet is not evenly distributed. Instead, we see the emergence of densely connected hubs—centralized islands in the net.

This kind of thing is called a scale-free network. It seems that something like scale-free structure emerges repeatedly within evolving networks, including on the internet, the web, social networks, airline routes,co-authorship in scientific papers, power grids,inter-bank payment networks,Bitcoin mining, train routes, gene regulatory networks,protein interactions, ecological food webs,oligarchies, neural networks…

In fact, it turns out that almost all real-world networks have degree distributions with a tail of high-degree hubs like this. (Newman, 2018. Networks.)

If you see a pattern emerge over and over, it’s a solid bet there are evolutionary attractors pulling the system in that direction. And yeah, it turns out scale-free networks have strange and important structural properties.

Scale-free networks are so common largely because of the efficiency they afford. Fully evenly distributed ones might be “better” in some sense from the perspective of survivability or resilience, but that the cost of highly inefficient function:

Hubs act as routers through which information can travel from A to B to C, efficiently. Scale-free networks areultra-small worlds. Hubs let you jump around the network in just a few hops. Distances in a scale-free network are smaller than the distances in a random network. This is why airlines build hubs.

The argument (which is particularly common in web3 circles) to fight for decentralization over all makes light of the advantages that competing scale-free networks will have in costs and efficiency. If you compare two crypto ecosystems with differing philosophies on this like Ethereum (prioritize decentralization, still care about usability) and Solana (prioritize usability, but still cares about decentralization), the second one has some massive advantages in driving the usage necessary for its existence. Again, one is not objectively better, it depends on its purpose.

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Taking Back Our User Accounts

July 28, 2021 • #

Identity management on the internet has been broken for years. We all have 800 distinct logins to different services, registered to different emails with different passwords. Plus your personal data exists in a morass of data silos, each housing a different slice of your personal information, each under a different ToS, subject to differing privacy regulations, and ultimately not owned by you. You sign up for a user account on a service in order for it to identify you uniquely, providing functionality tailored to you. Service providers getting custody of your personal data is a side-effect that’s become an accepted social norm.

Ethereum chain

In this piece, Jon Stokes references core power indicators in public finance like capital ratios or assets under management that help tell us when an institution is getting too big:

As a society, we realized a long time ago that if we let banking go entirely unregulated, then we end up with these mammoth, rickety entities that lurch from crisis to crisis and drag us all down with them. So when we set about putting regulatory limits on banks, we used a few simple, difficult-to-game numbers that we could use as proxies for size and systemic risk.

The “users table” works as an analogous metric in tech: the larger the users table gets (the more users a product has), the more centralized and aggregated their control and influence. Network effects, user lock-in, and power over privacy policies expand quadratically with the scope of the user base.

As Stokes points out, web3 tech built on Ethereum will gradually wrest back control of the users table with a global, decentralized replacement controlled by no-one-in-particular, wherein users retain ownership of their own identity:

Here’s what’s coming: the public blockchain amounts to a single, massive users table for the entire Internet, and the next wave of distributed applications will be built on top of it.

Dapps on Ethereum are so satisfying to use. The flow to get started is so smooth — a couple of clicks and you’re in. There’s no sign up page, no way for services to contact you (presumably unless they build something to do so and you opt-in to giving your information). Most of my dapp usage has been in DeFi, where you visit a new site, connect your wallet, and seconds later you can make financial transactions. It’s wild.

The global users table decentralizes the authentication and identity layers. You control your identity and your credentials, and grant access to applications if you choose.

Take the example of a defi application like Convex. When I visit the app, I first grant the service access to interact with my wallet. Once I’m signed in, I can stake tokens I own, or claim rewards from staking pools I’ve participated in proportional to my share of the pool. All of the data that represents my balances, staking positions, and earned rewards lives in the smart contracts on the Ethereum blockchain, not in Convex’s own databases. Services like this will always need to maintain their own application databases for aspects of their products. But the critical change with the global users table is that the user interaction layer exists on-chain and not in a silo’d database, with custody completely in the hands of the person with the keys to the wallet.

If more services use the dapp model and build on the public, on-chain global users table, what will the norms become around extending that table with additional metadata? With some systems like ENS (the Ethereum Name Service, decentralized DNS), subdomains and other addresses associated with an ENS address are properties written on the blockchain directly. This makes sense for something like name services, where they’re public by design. But other use cases will still require app developers to keep their own attributes associated with your account that don’t make sense on the public, immutable blockchain. I may want GitHub to know my email address for receiving notifications from the app, but I may not want that address publicly attributed to my ETH address.

Web3 is so new that we haven’t figured out yet how all this shakes out. The most exciting aspect is how it overturns the custody dynamics of user data. Even though this new world moves the users table out of the hands of individual companies, everyone will benefit (users and companies) over the long-term. Here’s Stokes again:

If you want to build a set of network effects that benefit your company specifically, it won’t be enough to simply cultivate a large users table or email list — no, you’ll have to offer something on-chain that others are also incentivized to use, so that the thing you’re uniquely offering spreads and becomes a kind of currency.

Incentives for app developers will realign in a way that produces more compelling products and a better experience for users.

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Annotating the Web with Memex

June 5, 2020 • #

I linked a few weeks ago to a new tool called Memex, a browser extension that touts itself as bookmarking for “power users of the web.” Its primary unique differentiator is how they approach the privacy angle.

I’m a couple of weeks into using it and it brings an interesting new approach to the world of bookmarking tools like Pinboard or Raindrop, both of which I’ve used a lot. Raindrop has been my tool of choice lately, but it’s heavy for what I really want, which is a simple, fast way to toss things into a box with tagging nomenclature to organize.

Memex

On the privacy topic from Wednesday’s post, Memex is approaching their product with similar principles. It’s is a browser extension only with no “cloud” element to it like most other services have. All of your data is stored client-side, and the only attachments to the cloud at all have to be opted-into, like syncing backups to Google Drive. It’s got an open source core also, for maximum transparency on how it works. Reading the vision document gives you a sense of where they’re headed:

The long-term mission of WorldBrain.io is to enable people to overcome information overload and the influence of misinformation through collaborative online-research.

We can’t research and understand all the topics we are exposed to well enough to not fall for misinformation. But we all are experts in some of those topics and could help each other understand them better — if we were able to share our existing knowledge more effectively with each other.

Decentralized knowledge management and web annotation is a movement I can get behind. I’m reminded of what Fermat’s Library is doing with academic papers — creating a meta layer of knowledge connection on top research source material. Passages highlighted in Memex could be referenced from other pages to denote connection points or similarities, building a user-generated knowledge graph on top of any internet content.

With Memex you never have to leave the browser. It overlays a small right-hand sidebar on hover with commands for bookmarking, adding tags, or displaying annotations. And they’re following through on their promise for power users with keyboard shortcuts. It also offers the option of indexing your browser history, which if you’re using DuckDuckGo but still want to archive your history for yourself could be useful. I don’t care much one way or another about this particularly, but it’s cool to have the option.

From mobile they have something interesting going. There’s a “Memex Go” app that works well for quickly bookmarking things from the Share Sheet on iOS. Syncing is a paid feature that works through a pairing process with end-to-end encryption to move data between mobile and desktop, synced over wifi. I haven’t tried this yet but I’m looking forward to checking it out. Seems like occasional syncing is all you’d need to move data between desktop and mobile, so this model could work fine.

I don’t think Memex has any integrations yet with other tools, but ones that come to mind that I’d love to see at some point are with two of my favorites: Readwise and Roam. From a technical standpoint I’m not sure how one would integrate a client-side database like what Memex has with a server-side one, but perhaps there could be a “push” capability to sync data up from Memex on-demand to integration points. With Memex’s highlights, perhaps I could decide if and when I want to send my highlights up to Readwise, rather than Readwise doing the pulling. In the case of Roam, even simple tools to drag highlights or bookmarks over as blocks in Roam pages would be a cool addition.

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