In a recent post we talked about how “decentralization is guiding the ship.” While the definition of the word can be guessed easily enough, the concept is nuanced and takes some time to understand the costs and benefits of decentralization.
Decentralization is a concept in politics, business, technology, and other fields. In a nutshell, it means a central authority doesn’t have control over a system, but control is distributed among the participants in the system. For example:
- A centralized political system has a central authority with most (or all) of the power. In a decentralized political system the power rests closer to the individual or their representatives.
- A centralized business structure has a central authority with most (or all) the power. In a decentralized business structure the power to make decisions is distributed between individuals and teams.
There are costs and benefits to these approaches in political and business settings.
The centralized approach allows for more rapid and decisive decision-making, as well as giving participants in the system a sense of clarity about the rules and their own role within it. It also sets up a structure to enforce those rules.
Unfortunately, this also highlights one of the primary drawbacks of centralized systems: what if the central authority acts in ways that are harmful to the participants in the system? There are innumerable examples of tyrannical governments abusing their power. There are also many examples of the leadership teams of companies making poor decisions and refusing to delegate power such that their decisions destroyed the company.
Decentralization avoids the abuse of power from central authorities. However, this comes at the cost of every participant taking on some responsibility themselves.
When we speak about Mobazha being decentralized, we are specifically referring to the architecture of the network itself. There is no central point of control in Mobazha, unlike Amazon or eBay. All participants in the network have equal power and can’t be forced by anyone else to do anything. This is radically different from the standard centralized model of ecommerce, and it has both costs and benefits.
There’s really no possible way to run a permissionless marketplace unless it’s based on decentralized architecture.
On the internet, everything you see is based on files that “live” on a server somewhere. A server is just a name for another computer. Most servers are owned (or rented) by the central authority than runs the website you’re visiting, usually a company. When you use Amazon for shopping, you are connecting to Amazon’s servers, just like everyone else using Amazon. This is a centralized system.
The decentralized system – like Mobazha – means computers aren’t connecting to a central location. They connect directly to each other. Basically, each user becomes their own server.
This is one of the costs of using a decentralized system. Each participant in a decentralized system takes on some of the power that the centralized authority would normally have, which leads to the benefits mentioned above. It also means that they will have to take extra steps they wouldn’t need to take in a centralized system. In a decentralized political or business structure, this might mean people are forced to direct themselves instead of just taking orders. Their success or failure is then dependent on their own actions instead of the decisions of the central authority.
In a decentralized network, it means the participants need to be running the program themselves on their computer instead of relying on the central authority to do that for them. For Mobazha, we have built on IPFS, allowing stores to go offline and still be available to other users if their store has been seeded. Even though this reduces the costs for users to access Mobazha, it’s still not as convenient as using the centralized ecommerce options.
Every user must weigh the costs and benefits of the different systems and determine which they prefer.
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