The Grind For Decentralization

I've heard many scoff at the CEOs and dev teams of a token who premine their project and then say:

Don't worry, we'll decentralize later.

While this is a highly laughable statement in many contexts, it's also the only way for legitimate projects to become decentralized. Not a single crypto network in history has started out decentralized. Even Bitcoin's first million coins were premined by Satoshi Nakamoto. In fact, most assume that if Satoshi moves any of his coins in any of his wallets, Bitcoin will instantly crash 90% or more.

How is that decentralized?

How can Bitcoin be decentralized if everyone is worried about the founder dumping their tokens? That's a literal definition "not decentralized". That is the main way that distributions and premines are an ever-looming threat hanging over the network.

The interesting thing about Hive is that we don't have this fear. Sure, there are huge whales on Hive that own over 1% of all tokens in circulation, but we've already been through the gutter. We already know what it's like when giga-whales looking to exit can crash the price to 10 cents and keep it there even as Bitcoin is going x4.

In this regard Hive seems to be even more decentralized than Bitcoin... which is a weird thing to say, and might not even be true given the fact that whales can control multiple accounts, but still... it MIGHT be true, which is crazy that it's even possible. In fact, it's true either way; the only question or not is whether this belief is actually justified and accurate. Hive does not fear a dump by the founder or any of the other whales. This is not the case for every other crypto I know of, most of all Bitcoin.

And while we are on the topic of Hive, the upvote/downvote mechanics allow us to be more decentralized much more quickly than something like Bitcoin. How does Bitcoin gain decentralization? People have to buy it on a centralized exchange... how ironic. Isn't that weird? This is literally the only way for Bitcoin to decentralize given a mainstream adoption era. Decentralized exchanges won't be useable for mass consumption until like a decade after that.

Speaking of decentralized exchanges...

None of them are even decentralized. The only decentralized exchange I actually know of is ThorChain/RUNE. That is all. Everything else is littered with centralized bottlenecks and wrapped tokens that are minted in centralized ways.

Something like Uniswap is only decentralized if the tokens being traded exist entirely on ETH. Same is true with Pancakeswap: only decentralized if tokens are on BSC. Ditto Sushiswap; Polygon. And even in that case, the tokens themselves have been programmed in a centralized way. Show me a single DEFI project on EVM where the dev team doesn't have complete unilateral control of the project. These EVM chains masquerading as layer two are a bit ridiculous. Ironically they would probably be even more decentralized if they were layer twos instead of layer one clones. Weird

But it's all a process.

See title: this is the ultimate grind. There are no shortcuts. Decentralization takes, not only a lot of effort, but a lot of time as well. The process is baked into the cake.

A lot of these VCs and corporations think they can just buy decentralization. They think they can buy an excited community that wants to work for them... for free... and they just get free money. How ridiculous is that? For those of us that lived through the hostile takeover, we know that's not how it works. Imperialism on the blockchain only works with consent. Actually that's how it works in the real world as well, which is why billions of dollars are spent trying to turn people against each other and spread rampant misinformation and other forms of propaganda. Citizens that consent to the system are much more profitable than those who aren't. This is why I have never and will never vote within the legacy system.

Betting back on topic.

When someone worries that some up-and-coming social media WEB3 crypto is going to pop out of nowhere and surpass us? Yeah, ridiculous. It's not possible. Not only that, if it happened it would benefit us, as we could copy their template within the open-source atmosphere. If it's not open source... then it's not WEB3 and we don't even have to worry about it. See how that works? Hive has a sweet niche, and much like Bitcoin has the monopoly on security, so to does Hive have has various niche monopolies.

Normally when we think of a "monopoly" or "corning the market" this would be an extremely bad thing. In crypto, not so much. There's no need to invent the wheel. We are creating fair systems that become a monopoly for a reason. If the system we build isn't fair someone will just rebuild a better version and take that functionality away from us. It's the ultimate healthy version of competition.

There are a lot of things that Hive can do, and it's unclear how are niche is going to solidify. There are a lot of moving parts and nothing is set in stone yet. For example, Hive could become a gaming network given the right game developer eating up all Hive's resources. Hell, Hive could become a porn network. Luckily video can't be stored directly on chain so the vast majority of that would be on another layer 2 solution. But imagine if that layer two had 100M users. Even though Hive only stores text... 100M accounts all casting upvotes is more than enough to dominate all our bandwidth. Again, it's unclear how this is going to play out. There are a lot of niches out there that need to be filled.

This is yet another reason why I'm not convinced that EVM tech is going to be very successful. If the point of crypto is for everyone to pick a niche and be good at a small subset of activity, then general purpose blockchains like ETH, BSC, and Polygon are certainly going to fall by the wayside. Trying to do everything on one inefficient network is not a very good strategy. We need to divide the workload.

However, there are certain niche functions even inside general purpose blockchain. For example, as already stated, atomic swaps become trivially easy to implement and the liquidity pools between all the tokens built on the layer one becomes an exponential advantage. In this respect EVM chains may become the testnet incubators used for new projects. The tokens that succeed and need to scale up will move off chain and likely create their own chain (or move to a layer 2 solution... which is almost the same thing).

Conclusion

All competition in crypto is healthy competition. The open source solutions that outperform the current paradigm can only benefit the cryptosphere as a whole. Unlike the corporate world, it's not possible for some rich guy to move in and scoop up the entire market with deep pockets. That's not how it works. That's not how community works, and it's not how sovereignty, trust, or freedom works, which are the foundations of crypto.

Decentralization takes time, a lot of time. Some of these centralized networks will be able to pull it off, and some will not. The safest bet is to just jump into the networks that already have a decent level of decentralization with a history of acquiring more over time. Certainly not the most profitable bet, but in a market this volatile and valuable, increasing risk is often a fool's errand. Keep grinding.

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