Decentralization as a Symptom
In the past year, I became heavily involved in the web3 integration of fashion. I was in an unusual position, as I had both presented research on hacking a blockchain and shown collections in New York Fashion Week. The cynical, cybersecurity part of me was thrown into a world of seemingly naive crypto-hopefuls with sufficient — yet often shallow — understanding of the technology. The fashion part of me felt immersed in a world of opportunity, with events, connections, and deals popping up left and right. The fashion industry is an interesting point of reference, as it is one of the few industries that has equally important physical and digital aspects throughout the modern world. It allows us to see how the idea of decentralization can be deceiving and how it mutates as time passes, even to the point of losing its own nature.
In the beginning, digital fashion wasn’t tied to the blockchain. Nobody was talking about polygon, solana, or NFTs, rather considering the possibility of trying on clothes without having to go in-store. At most, digital fashion extended to in-game skins; but in the past few years, the art world was consumed by NFTs, and fashion soon followed. In that sense, fashion’s understanding and adoption of decentralization started with NFT technology, but the concept of decentralization spilled into other aspects of the industry. Proof of “wear”-to-earn or “play”-to-earn structures became the norm. All of a sudden, designers who had no chance of entering the physical industry (due to costs, connections, etc.) started creating digital pieces that could be seen and sold everywhere, and the digital nature of these assets allowed the concept of fractional ownership to emerge. Ownership became decentralized. Over-saturation. Platforms and networks like Digitalax and Stylexchange sprung up to organize these digital assets, ironically creating clusters of centralized platforms for decentralized content.
This is a theme that pops up again and again, with everything but the purest base of decentralized technology being centralization in disguise. The idea of decentralization attracts people because it seems digestible, easy, and welcoming. There is a belief that “anyone can make it if they try,” and there is no large conglomerate dictating who is and who isn’t good enough to do something. There is also a constant praise and implicit expectation of trust and privacy, as if standard centralized platforms lack the necessary amount. Yet, when decentralization shows failure — like in the event of a $320 million hack — those affected try to turn to someone for solutions, only to find that there is often no one there to answer the call.
It seems that people don’t actually want decentralization.At least, they don’t want a world where money can go missing or diminish to $0 without accountability (as is the case for many un-backed, un-pegged ICO cash grabs). They don’t want a place where record-keeping can be weaponized, for example by doxxing someone through a permanent record on the blockchain. The problem is that the technology on its own — without a controlling (and generally centralized) platform — inherently allows these things to happen.
The important question we need to address is the following: Why are we so desperate to make the idea of decentralization work? At best, it hints that we are eager for innovation.At worst, it shows a lack of trust in the current global power system. It isn’t innovation. To further analyze this, we need to track where decentralization actually took off. Decentralization as a concept is intended to prevent the rise of single points of failure through the distribution of work and peer-to-peer verifications. Its nature is useful in things like cybersecurity, contracts, and even (less technologically) manufacturing.
However, cybersecurity firms haven’t flocked to the space despite the very desperate need for their participation in web3. Law firms and enterprises haven’t adopted the technology for transactions or record validity — at least not to the point that anyone has bothered to talk about it. Where we have seen things flourish are in the areas of finance, fashion, and art. We could argue that this is because enterprise technology and legal services are “set in their ways” while things like fashion and art represent a more adventurous audience, but this argument breaks down in the face of finance.
In 2018–2020, it wasn’t just startup cryptocurrencies that were adopting the technology. Giant financial powerhouses like the DTCC were modifying it for their own needs at varying levels of success. The true distinction between these two approach groups is that one initially targets the average person. The other excludes all but the richest few from the onset.
Most people don’t have frequent interactions with lawyers. Most people don’t deal with corporate contracts. But people see art and fashion every day on social media. They wear it to school, they modify it in-game, and they watch it on Netflix; and underneath it all is the sentiment that,”if only I had more money, I could truly participate.” And so the art that was created for art’s sake gets drowned out by the art that was created or bought by the fear of missing out, and the same happens in fashion and other aspects of society where the regular person gets a chance to participate.
Underneath it all is the need to “get in early,” to not miss the opportunity to… what is it, exactly? We can convince ourselves that it’s all for innovation, but hidden beneath the surface is a lack of trust in a current economic system that deprives people of financial security/progress at a global scale. Do truly decentralized technological systems have a place in our society? Sure. We see this in physical fashion through luxury item verification. We see it being useful to check integrity throughout a distributed supply chain. More ambitiously, it might be useful in modernizing/enforcing copyright throughout a digital landscape.
Decentralization is a tool that certainly serves a purpose, but it isn’t the universal cure we’re trying to force it to be.
