The Benefits of Decentralization Go Far Beyond Ideology


The 1970s was an era of individualism and a decentralized internet. While not all of the circa 1970 trends may be coming back in style - I’m looking at you, tie-dye t-shirts - decentralization is very much back in vogue, and it’s definitely not going the way of the 8-track.

In a broad sense, decentralization refers to a process that disperses information from an area of concentration and power so it can be retrieved and accessed even if that centralized area became compromised. Many entities can be decentralized - governments, economies, corporations - but decentralizing technology is one of the defining issues of our era. The decentralization of technology is a concept most often associated with free market economic theories as well as democratic, libertarian or even anarchic political ideologies, which are among the reasons why people are often interested in technological decentralization. While this can be approached from many different perspectives, we’re hoping to explore the practical benefits of decentralization with respect to how it can make technology better. Even though the internet is made of millions of separate machines that communally share information, its traffic and data is routed through and stored on very few centralized platforms. From the early days of the World Wide Web in the 1970s to the early 2000s, internet services were widely decentralized and built on open protocols controlled by the community. This made starting internet businesses and platforms relatively easy and allowed for companies like Google, Amazon and Facebook to start up and gain popularity over existing platforms like AOL. From the mid 2000s to now,these same companies have changed the internet game, dominating the software market over the original open protocols that helped them get established in the first place. Now it is significantly more difficult to compete in the marketplace with the rules of the game set by the biggest players. Today, Google and Facebook control over 75% of all internet traffic. Amazon Web Services, the most popular cloud platform, controls 33% of data in the cloud.

These companies are the epitome of a centralized internet. Though their platforms offer convenience, this comes at the expense of privacy, security and individual liberties. Some of the architectural designs of decentralized internet traffic and data storage promise to solve these issues. These benefits include fault tolerance, attack resistance, collusion resistance, and economic empowerment. Together, these features can prevent data outages, theft, and manipulation, as well as promote technological advancement, individual and economic empowerment, and possibly enable new capabilities that we have yet to understand.

One of the most talked about and easily understandable features of decentralization is fault tolerance, which measures how resilient a service is against outages. A decentralized system has no central point of failure and is less likely to fail due to power outages or hardware failures. One central component is more likely to fail than all of the separate components in a decentralized system. We’ve all seen instances like the Slack servers going down for hours at a time, disrupting workflow, or collaboration and Google search timing out, causing world-wide internet traffic to plummet. As recent as this past June, the largest AWS data center in North America experienced a power outage, resulting in website downtimes and permanently lost data due to hardware failures. A more decentralized network could prevent incidents like these.

The second benefit of a decentralized system is an increased resistance to attack that centralized networks do not have. Decentralized systems are more expensive to attack and destroy or manipulate because there is no central point that can bring the network down or through which a perpetrator could access data all at once. The very nature of decentralization prioritizes security and encryption, which also contributes to attack resistance. Since 2005, the frequency of data breaches has increased tenfold, making the case for an alternative solution to typical centralized data centers. The most recent and impactful of these was the Equifax hack of 2017, in which almost 150 million customers - about half of the United States population - had their personal identification and credit information compromised in some way.

The collusion resistance found in a decentralized system also makes it harder for participants to conspire against other participants for self-benefit, since no one group owns or completely controls the network in a well-distributed network. We’ve already seen some scary effects of centralized technology in China. Here, only a handful of tech companies control the vast majority of applications (and their data), personal information can be accessed sans-warrant, and the government and police can spy on their residents and censor their data flow. Along with Black Mirror-esque social credit systems and police predictive systems, the state has exercised its right to target and incarcerate ethnic and religious minorities and political dissidents. But networks can develop platform-grade censorship resistance if the decentralized system is large and robust enough.

Finally, we contend that decentralization can economically empower a larger number of people. Decentralization allows for market forces to optimize the network at a greater rate than any single entity could afford, both on a economic and technological level - think open source. The technology advancement and payoff become meritocratic as those who work on the network are more likely to have incentives aligned with those of the network. Network ownership alignment promotes product development that is most beneficial to its end users. It is also easier to start a company in an environment where you help create the rules, like in the early days of the internet.

One of the most talked about benefits of decentralization is that of finance and currency. Venezuela has been experiencing extreme hyperinflation and dealing with a corrupt and incompetent government and national economic policies. Cryptocurrency, which is based on decentralized governance, has been shown to be promising for Venezuelan residents. Since it is decentralized and thus available internationally, it holds more value than a bolivar, both within and outside Venezuelan borders.

At Storj, we are building a decentralized cloud object storage network to replace traditional centralized data centers. As mentioned previously, data centers experience many challenges including data breaches, periods of unavailability, high costs, and infrastructure demand versus supply. Decentralized storage has emerged with solutions to these challenges, offering performant, secure, private, and economical cloud storage. It is aligned with the architecture of a decentralized internet and the benefits it provides. But by 2020, 44 zettabytes (4.4 x 1022 bytes) of data are expected to be created annually worldwide and the US cloud storage market is projected to grow to $92 billion by 2022. We propose a framework that scales horizontally to support this data growth and protects the data from outages, attacks, collusion, and promotes economic empowerment. The Storj Network, is a robust and resilient object store that encrypts, shards, and distributes data to crowd-sourced hard drives across the globe, on what we call “storage nodes.” The network is open source and allows anyone to earn their spot in the network as a storage node operator, developer or partner and compensates network participants fairly.

Here’s to a more just, open, and secure internet. Here’s to decentralization.

Watch for our articles about how we deal with encryption, data loss, network attacks, node audits and more in the following weeks. See you soon!