Decentralized Networks

Comparing Consumer Networks on and off Blockchains

Decentralized consensus is a modern phenomenon in computer science that is employed to disrupt the control of a large network of digital consumers by a singular or small cartel of decision makers.

Centralized entities are not inherently bad for consumers and often benefit the majority of digital services that exist in the world. Users in centralized entities often enjoy:

  • Quick decision making capability

  • Faster iteration and product improvement cycles

  • Power law returns due to concentration of specialized manangement talent

  • Ownership structure that is highly incentivized to make products users enjoy (to make money)

The consumer in any digital services network wants cheap and useful solutions to their problems and/or inexpensive entertainment that delivers value for their dollar. The competition generated by competing centralized forces often deliver this to the consumer with no need to consider a collective structure like those found in blockchain projects. (often these are useless products)

However the rare case may arise in which the digital product, when highly centralized, creates a caustic atomosphere which punishes the consumer network due to overbearing regulatory and corporate control. Centralized entities can generate negative effects by:

  • Over-regulating the space making it impossible for incumbants to compete

  • Restricting data access so that companies must pay exhorbitant fees to providers

  • Arbitrarily limiting a customer's use case to enforce a low utility behaviour

  • Setting uncompetitive prices to squeeze the users utility and push it to shareholders

  • Making arbitrary decisions that effect a products use case and suddenly change utility

When these effects become too restrictive or harmful to the consumer and the consumer has no competitive alternative, there is no choice for the consumer aside from putting up with the harmful product, not using the product, or re-imaging the product as a collectively controlled alternative that forbids a central control from harming the networks utility.

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