The importance of decentralisation

The concept of property, and the fact that our laws and government are built around protecting it, is the sole mechanism through which massive disparities in power are achieved and maintained in society. It centralizes wealth through avarice, making our stomachs unlimited in size. It also creates the dilemma of externalities, as we differentiate the value to us of the things we "own" versus the things we hold in common with others or that are "owned" by the state.

Property is also a entirely artificial concept. It takes the practical concept of use and possession and extends upon it to completely absurd extremes. It ties our society up in knots wasting a massive amount of human energy in the activity of determining and enforcing property ownership, and leads to incredibly convoluted structures in laws and markets, often leading to huge structural failures.

For instance, intellectual property law is completely absurd, on every level. It is an effort to force something that is fundamentally free and infinitely available to everyone to become scarce exclusively so that we can properly ensure it fits into a property-based system. The amount we lose as a society from the fact that all software is not simply open source is incalculable.

Faith in cryptography will not help anyone with fraud, theft, and trust.

Naive neo-liberal libertarians and anarchocapitalists attempt to claim deregulation will just work because they've never encountered abuse, fraud, negligence, or read any history.

  One important point: if we actually include all 7 billion 
  people on the earth, most of whom have zero BTC or 
  Ethereum, the Gini coefficient is essentially 0.99+. And  
  if we just include all balances, we include many dust 
  balances which would again put the Gini coefficient at 
  0.99+. Thus, we need some kind of threshold here. The 
  imperfect threshold we picked was the Gini coefficient 
  among accounts with ≥185 BTC per address, and ≥2477 ETH 
  per address. So this is the distribution of ownership 
  among the Bitcoin and Ethereum rich with $500k as of July 
  2017.


  In what kind of situation would a thresholded metric like 
  this be interesting? Perhaps in a scenario similar to the 
  ongoing IRS Coinbase issue, where the IRS is seeking 
  information on all holders with balances >$20,000. 
  Conceptualized in terms of an attack, a high Gini 
  coefficient would mean that a government would only need 
  to round up a few large holders in order to acquire a 
  large percentage of outstanding cryptocurrency — and with 
  it the ability to tank the price.

  With that said, two points. First, while one would not 
  want a Gini coefficient of exactly 1.0 for BTC or ETH (as 
  then only one person would have all of the digital 
  currency, and no one would have an incentive to help boost 
  the network), in practice it appears that a very high 
  level of wealth centralization is still compatible with 
  the operation of a decentralized protocol. Second, as we 
  show below, we think the Nakamoto coefficient is a better 
  metric than the Gini coefficient for measuring holder 
  concentration in particular as it obviates the issue of 
  arbitrarily choosing a threshold.


  ...However, the maximum Gini coefficient has one obvious 
  issue: while a high value tracks with our intuitive notion 
  of a “more centralized” system, the fact that each Gini 
  coefficient is restricted to a 0–1 scale means that it 
  does not directly measure the number of individuals or 
  entities required to compromise a system.


  Specifically, for a given blockchain suppose you have a 
  subsystem of exchanges with 1000 actors with a Gini 
  coefficient of 0.8, and another subsystem of 10 miners 
  with a Gini coefficient of 0.7. It may turn out that 
  compromising only 3 miners rather than 57 exchanges may be 
  sufficient to compromise this system, which would mean the 
  maximum Gini coefficient would have pointed to exchanges 
  rather than miners as the decentralization bottleneck.


  Conversely, if one considers “number of distinct countries 
  with substantial mining capacity” an essential subsystem, 
  then the minimum Nakamoto coefficient for Bitcoin would 
  again be 1, as the compromise of China (in the sense of a 
  Chinese government crackdown on mining) would result in 
  >51% of mining being compromised.
  
  - Balaji S. Srinivasan (the CTO of Coinbase) 

The problem is that in biology, you don't have intelligent entities exploiting the centralization, which is I think where the metaphor breaks down.

Interestingly, the metaphor isn't completely broken; I have seen serious discussion of thing like cancer, and even more interestingly, what can convince a cell to not be cancer, in terms of self-interest and exploitation and such. One of the mysteries of how multi-cellular life ever got started was how one cell convinces another to not seek its own survival at all costs. Being rather complicated multicellular entities ourselves, we take this for granted, but it's a legit research topic.

Still, the cancer abusing the system is not doing it with human-level intelligence, whereas arguably Facebook is a super-human level intelligence, so the metaphor is not great.

You can build centralization on every layer of the network stack. Facebook is centralization on the application layer. The problem is that with IP addresses being as rare as they are in the ipv4 space you have a lot of tricks that you need to use and ultimately you go through someone using a real ipv4 address.

Ipv6 doesn't have that, so it lets you decentralize further down the stack. While this is good in its own right, currently we don't have issues with ip address monopolies, unlike application layer monopolies.

And that's the problem we have. Doesn't matter how many open layers you have, someone can always build a closed system on top of them.