Blockchain Technology and Discrete Coordination: Exploring Decentralization

• By silvi willemson
• 09-01-2023
• Blockchain

What Is Decentralization?

Of course, blockchains won't miraculously solve all of society's ills. There isn't technology or a technique that can do that. It has to do with the overconfidence in AI and the reductionism of Silicon Valley's tech evangelists. While this may not entirely assuage his concerns, their pervasiveness in culture may. As we reach the era of Web 3.0, the financial power Silicon Valley has used to take from the Web 2.0 landscape's data and value has begun to trickle down to individual customers. Furthermore, the social decentralization made possible by blockchain technology can be used to redistribute and re-democratize human participation and collaboration patterns. Third, because there is no centralized authority controlling a blockchain, but rather the network of participants, they are able to establish their own rules for participation and elect to evolve the system according to consensus, making it resistant to censorship and inherently more elastic than most other decision-making mechanisms for large groups of people.

Even more importantly, blockchain-based technology may eventually make possible the kind of massive decentralized coordination and alignment of human motives that was previously only achievable in hierarchical, command-and-control organizations. "decentralization" is distributing power and responsibility to a greater number of smaller entities. Decentralized systems make it difficult, if not impossible, to pin down a single point of control. The Internet can be understood at its most fundamental level as a decentralized network. Blockchain technologies, such as Bitcoin and Ethereum, are examples of decentralized designs and systems.

The challenge of getting a lot of people to live and work together in harmony and produce results is central to the story of civilization. The potential for blockchain to decentralize authority away from centralized entities such as governments, major corporations, and even large cities is a common argument in favor of the technology. Everyone living today has been socialized inside the hierarchical, top-down command and control paradigm, which makes decentralization difficult to adopt. At times, people in a network may feel forced to fall back on their tried-and-true approaches to working together. For this reason, they should actively pursue a decentralized social model enabled by digital technologies. They are not striving for a singular objective or vision, but rather looking for fruitful avenues and ways to trade freely.

Blockchain Technology and Decentralized Network Governance

In order to construct digital domain governance, it is vital to conceive the essential elements of power relations inside the digital domain in relation to Mode 1 and Mode 2 governance. Neither type of government is capable of ensuring a secure and trustworthy blockchain network. The main cause is that new roles and power dynamics in the digital sphere don't conform to either horizontal nor vertical frameworks. Instead, they are flexible, with a single, nameless actor often playing a number of parts and holding a number of different levels of authority. Second, blockchain technology delivers trustlessness, which is important for Mode 1 and Mode 2 governance but not for the former. This section will set the stage for the theory of decentralized network administration shortly after introducing the first repercussion.

What components of a system of power interactions are considered relevant to govern are conceptualized differently depending on the type of government in place. Due to the fact that different actors assume different governance roles in different circumstances, it is important to consider power to be in constant motion in the digital realm and blockchain environment. A network's ability to delegate roles within itself makes it a potential actor in governance. Administration needs to adapt to the new kinds of power that have supplanted identities and positions as the major ways of exerting influence in social coordination. Networks have four types of power: networking power, network power, networked power, and network-making power, as described in Castells's books on network power (previously quoted). All these things are analogous in some way to the online world and to blockchain technology:

• Networking power:The most influential members of a network are its nodes, or its central players and institutions. One example of such power is the ability to decide who joins or departs a network and, in turn, who has a say in the network's make-up.

• Network power: The authority to govern interactions based on established rules within a network. It is crucial that rules inside a network be strictly enforced.

• Networked power: wherein participants inside the network exercise authority over one another. This power is similar to more traditional conceptions of power, albeit its actual application differs from network to network.

• Network-making power: the ability to create or reprogram a network in accordance with one's ideas and interests.

New technologies, such as blockchain and DLT, could fail if governed using outdated methods. Whether it's through overzealous regulation or a lack of adequate procedures, digital technology's benefits can be limited at times. There could be more negative than positive unintended outcomes if laws and planned governance norms of technological solutions don't line up. Instead, the distributed ledger technology's ability to impose governance could eliminate the need for excessive oversight.

Big data actors and governments may miss their targets or have their progress hindered by top-down control due to the borderless nature of the digital domain. It is well accepted, for instance, that while "code changes rapidly, user adoption more slowly, legal contracting and judicial adaptation to new technology even slower than that, and rules through legislation even slower than that" (Brown and Marsden, 2013, p. xv). Therefore, one-sided solutions should be avoided. Due to the inflexibility of Mode 2's responsibility distribution, blockchain-based governance may not be able to fully realize its promise. Integrating actors into governance processes based on their potential to produce policy goals carries the risk of privatizing monitoring into the hands of those with the most authority.

We propose a novel network approach to governance in order to better accommodate the dispersed character of governance structures, such as those provided by blockchain solutions and DAOs in particular. We propose a method of decentralized network governance in which governing tasks are constantly assigned based on competency and actual authority. This means that roles in governance are not assigned on the basis of the identities of the participants or the roles they can play inside the system. Because numerous actors fill several roles inside blockchain frameworks, simultaneously, this perspective on governance emphasizes the relational nature of power. In light of the dynamic nature of power dynamics within a governance system, it is essential that governance roles be flexible. The equilibrium of power between two or more parties may swing in either direction, depending on the dynamics of their interplay.

Significant Gains from a Decentralized System

1.) It contributes to an untrustworthy setting.

In a trust-free, Blockchain decentralized ecommerce marketplace it is not required to rely on the good faith of other buyers and sellers. This is because all participants in the network have access to the same duplicated copy of the record or identifying data. Anyone else in the network who sees that a member's record has been tampered with or corrupted will likely ignore it.

2.) Helps with data recovery

Data sharing between businesses and their allies is common practice. This information is continuously updated and maintained in both parties' databases. Errors and missing information can propagate throughout an organization far more easily when data is updated. Because the data is stored in a decentralized manner, anyone has access to the most recent version of the data.

3.) Reduces the severity of deficits

Failure rates in systems with an excessive reliance on explicit individuals may drop if they are decentralized. Factors such as asset weariness, intermittent blackouts, bottlenecks, a lack of suitable incentives for great performance, and fraud could lead to catastrophic failures, such as the inability to deliver assured services or ineffective aid.

4.) The most effective allocation of assets

Decentralization not only makes it easier to distribute resources, but it also makes it so that the promised services are delivered more efficiently and reliably, with less room for catastrophic failure.

Final Reflections

To put it briefly, the blockchain is a distributed database that acts as a catalog for transactions and resources shared among peers. Cash and transaction records aren't the only types of data that can be considered a "resource;" ownership records, contract details, product information, and more can all be included. Unlike previous peer-to-peer networks, a blockchain doesn't replicate the communicated value. However, it does indicate a transfer of credit from one team member to another.