This blog post explores how blockchain decentralizes centralized systems and impacts human life. Join us in exploring the changes and possibilities this technology will bring.
In 2017, the world was swept up in a cryptocurrency craze. People emerged claiming to have earned billions or tens of billions of won by investing in cryptocurrency, and despite media reports labeling it speculation, many invested. While the bubble burst and the prices of many cryptocurrencies plummeted, the underlying blockchain technology behind this craze holds the potential to fundamentally alter the direction of human progress. Since its emergence, humanity has developed solely in the direction of centralizing resources and information. Attempts to counter this trend existed but never became mainstream. However, blockchain, born from technological advancement, embodies the value of decentralization. This article examines the process by which Homo sapiens developed toward centralization and, using cryptocurrency—a prime example of blockchain—argues for the potential of this technology and what decentralization means for humanity.
Homo sapiens has continuously evolved alongside the use of tools. Yuval Noah Harari’s book Sapiens divides this evolution into the Cognitive Revolution, the Agricultural Revolution, and the Scientific Revolution. Each revolution saw an explosive increase in the information and resources humanity possessed, which became increasingly centralized. Sapiens, who lived in groups, formed city-states, and some of these city-states grew into vast empires. Empires collapsed and fragmented into multiple nations, yet within the wheel of history, states grew ever larger, taking on the form of modern nation-states by the 20th century. Governments managing these states are composed of interacting institutions. Each institution manages citizens’ personal information or collects taxes, using these resources to care for the state and its people while interacting with other nations. In the modern era, multinational corporations exist alongside nation-states. Multinational corporations hold personal information on tens of millions to billions of people, using this foundation to conduct business activities across diverse fields.
In modern society, information and resources are highly centralized, controlled and managed by a tiny minority. The information power held by global corporations is immense; Google, for instance, can predict flu outbreaks based on user search data even before the Centers for Disease Control and Prevention. Policies are formed and new business models emerge based on this vast amount of information and resources. However, without criticism in this environment, groups possessing vast resources and information can descend into a kind of barbarism. Companies holding large amounts of data sometimes neglect security, leading to personal information leaks. Some executives may siphon off user data to sell to other companies or make unethical decisions by circumventing laws. To counter these issues, oversight bodies exist to audit nations and global corporations, and legislation is enacted governing how they utilize their information. Yet such checks can only help maintain transparency and balance; they are not fundamental means to restrain centralized information and resources. The fundamental check on centralized information and resources is decentralization. Decades ago, decentralization was not recognized as a check on centralization. People simply did not trust distributed networks.
Homo sapiens traded primarily through barter for a very long time, and the period of using currency is extremely brief in our long evolutionary history. The concepts of banks and credit emerged even later. Despite this short history, in the financial sphere, Homo sapiens trusted centralized organizations more. They believed that centrally managing the wealth of many people was more efficient and stable, leading to a development where trust shifted toward centralized organizations possessing greater capital and information. Isn’t depositing money in a bank far more reliable than leaving it with a pawnshop? Since the emergence of banks and credit, these concepts have evolved toward increasing centralization and scale, never moving in the opposite direction.
However, the information revolution and the emergence of blockchain technology provided a technical foundation for those pursuing the value of decentralization. The value of cryptocurrency is still highly volatile and not yet fully mature. Yet, cryptocurrency demonstrated that a currency could exist where prices are controlled by users participating in the network and transactions are transparently disclosed to all participants—a currency not controlled by central governments or banks. Blockchain technology enables transparent information disclosure not only for monetary functions but also across various fields like healthcare and law.
Decentralization also provides the value of stability. Blockchain networks continuously add new blocks on top of existing ones, and because network participants share this record, hacking is nearly impossible. Centralized information is vulnerable to risks. If no copies of the original information exist, its authenticity cannot be verified if the original is corrupted. To prepare for such situations, multiple copies are created to confirm authenticity; blockchain can be seen as everyone sharing the original.
Using this technology does not guarantee absolute security. There have been cases where cryptocurrency exchanges were hacked, or individuals’ cryptocurrency wallets stored on PCs were compromised. Furthermore, the recently proposed GDPR (General Data Protection Regulation) in Europe directly conflicts with blockchain. GDPR guarantees the right to erasure of personal data, but blockchain stores information sequentially in blocks, making it impossible to alter past entries. While it is still an evolving technology and ongoing legal discussions prevent definitive conclusions, it is clear that blockchain technology offers new levels of security compared to existing systems.
Sapiens gained access to more resources, capital, knowledge, and information, yet as resources and information increased, the gap between the haves and have-nots widened further. While developed nations and various private organizations support developing countries through Official Development Assistance (ODA), ODA takes many forms and often prioritizes the donor country or institution’s perspective over the recipient nation’s circumstances. However, blockchain technology can provide opportunities to people in previously unimaginable ways.
South Asia, Africa, and the Middle East have lower bank account penetration rates compared to other regions. In the Middle East, many women in particular lack access to accounts. These women, along with others unable to open accounts, can now access financial services using cryptocurrency. Women who might have spent their entire lives outside the economic system can now enter its framework. In Africa too, increasing mobile penetration is enhancing access to cryptocurrency and fintech. Technological advancement and increased accessibility provide the starting point for offering more opportunities to more people.
Science and technology are value-neutral. Whatever outcomes technological progress brings, it is not the technology itself but the humans using it that determine the results. As Homo sapiens left their evolutionary footprint, self-destructive phenomena like war and environmental pollution emerged. Yet Homo sapiens have found paths to happiness and achieved remarkable accomplishments in fields like biotechnology, cyborgs, and artificial intelligence. Blockchain technology is one tool discovered along this journey. Utilizing this technology allows us to pursue the value of decentralization beyond the centralization of capital and information, thereby granting opportunities to more people. Homo sapiens have developed by continuously centralizing capital and information. The value of decentralization lies not in eliminating all centralization, but in counterbalancing centralized capital and information to steer the lives of Homo sapiens toward a better direction.
