A focus on Decentralization: the meaning of this word for the future society

5 September 2023

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Decentralize: "transfer (control of an activity or organization) to several local offices or authorities rather than one single one."we need to decentralize energy production"; move departments of (a large organization) away from a single administrative centre to other locations."new technology allows companies to decentralize large factories". If you search iona Dictonary the meanings of the word "decentralize" that's what you find as a complete definition. Here we put two definitions, an abstract one and a business one. We need to analyze both if we want to understand what will be the next meaning of this word for the economy and for our everyday life.

What is decentralization?

In Web3, decentralization is a consequence, rather than a starting point. A consequence of the functioning of the Blockchain, which is the heart of Web3. It is neither more nor less than a P2P (peer to peer) storage of information, secured by a chain.

What is P2P? Do you remember the great days of illegal downloading, in peer to peer, with software like BitTorrent? It's the same principle, but more secure thanks to chaining. 

Explanation: a file is divided into blocks, distributed among the different users, who own a part of the information without owning the whole. Their computer makes this block available to other users, and vice versa.

Result: the data does not belong to anyone, and the transactions or changes made in these data are linked in chains. Hence the name Blockchain. But, if these data belong to no one (and thus to a little bit of everyone), how are they protected?

Why does decentralization guarantee data security?

Data security is based on the decentralized nature of the Web3. To understand this, we need to look at its weakness, and the possible attack known as the Goldfinger, or 51%. 

A blockchain, to exist, must be validated by programmers called miners. These miners form pools, in which each of them represents a node. In other words, a point of passage and storage of information.

When a miner introduces malicious code into the blockchain, this corrupted node is corrected by the other miners, who render its block orphaned, and therefore inoperative. The integrity of the chain is thus preserved.

The problem appears when 51% of the blockchain is held by a single entity, which therefore undermines the majority of the information in the chain. Why? Because a modification can be made in one go to more than half of the chain, and thus make the whole corrupted blockchain legitimate. 

Decentralization no longer exists, since a monopoly has been formed in the control of the nodes, which endangers the very existence of Web3.

Why decentralization in Web3?

If decentralization has flaws, why use it in Web3, which is normally an improved version of the very centralized Web2?

Because power and control are two terms that Web3 intends to reappropriate. 

On Web3, power is the power of the user to dispose of his personal data as he wishes, but also of his money. 

The control is the security of the data, by the development of an independent and open Internet. 

 There are many examples of its necessity, such as those of the Greek state and GAFAM.

Capital control by the Greek state

In 2015, the Greek government showed how the population and its capital can be controlled. By depriving citizens of the right to withdraw their money from banks, it highlighted the control to which a centralized entity can subject its citizens.

The development of crypto-currencies, which are entirely based on Blockchain technology, notably Ethereum, but also Helium, The Graph, Filecoin or Livepeer, breaks the monopoly of banks. Control is therefore changing sides.

GAFAM: data collection and centralization

On the web, it is mainly Google, Apple, Facebook, Amazon and Microsoft (the Gafams) that centralize our data on their servers, control it, and sell it. They are thus accessible to governments, but also to hackers.

Thus, in 2019, data collected by Microsoft, on 250 million users, were published on a hacker forum. In 2018, 330 million Twitter users were affected by a data leak. In 2013, at Yahoo, they were 3 billion. 

What are the advantages of decentralization in Web3?

No collection and use of data by an authority,

Loss of influence of GAFAM,

Great privacy protection, 

More practical than web 2.0, 

How does decentralization work? 

What does a website or application look like on the Web3? Exactly the same as on web 2.0. The frontend programming languages are the same (HTML, CSS and Javascript), as well as the backend languages (Python, C++, Java, Ruby, etc.), and therefore look the same. 

On the other hand, instead of storing the site and user data on a server, they are stored via the Blockchain in P2P, and accessible through protocols such as IPFS or Golem. 

H2 Who are the main players of Web3?

You have understood that GAFAM, and their business model based on the collection of personal data, are put aside. But, who are the major players of this new technology that is Web3? They are notably: 

  • Sia
  • Filecoin
  • IPFS
  • Golem
  • Storj
  • Swarm

These players are more protocols than companies per se. They combine P2P networks with the Blockchain protocol. They do not own the information stored by users, but are responsible for encrypting it.

For example, IPFS (InterPlanetary File System) is a free software designed to search for content stored on P2P networks. 

Conclusion

You now understand better the importance of decentralization for Web3. Conceived as the absolute antagonist of the web 2.0 we know today, Web3 intends to give the power back to the user.

The capture of his data by a centralized authority becomes much more complex and, without his consent, simply impossible. 

The banks' stranglehold on the banking system and the fees they charge their customers, or to put it more diplomatically, their monopoly, is profoundly challenged by what Web3 has made possible: the mining of crypto-currencies. 

A new digital era is therefore opening up before our eyes. 

In collaboration with Web3 Academy

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