Simplicity matters for decentralized protocols

Crypto Comics

In the context of crypto, decentralization rarely aspires to grant every single person on the planet a vote on how a cryptocurrency project is governed. Bottom-up governance in crypto is different from a concept like democracy, where anyone can vote.

Not in the sense that it isn’t technically possible, but in the sense that it is extremely unlikely. It is unlikely that the average Joe will ever vote on a proposal within a cryptocurrency project. And for a variety of reasons. People have their own interests, own lives, and it takes a lot of effort to understand what you’re voting for in the first place.

This presents a problem to cryptocurrency projects which also want to be decentralized. The more complex a cryptocurrency project is, the harder it is to achieve a respectable level of decentralization.

And to my knowledge (I could most definitely be wrong), this problem is not talked about enough.

While cryptocurrency projects have been criticized for their complexity in the past, this usually isn’t in reference to decentralization. Rather, the criticism has to do with the loophole problem. What this means is that the more complicated your project is, the more likely that there are loopholes in the code for hackers to exploit. For example, projects like Ethereum are way more complicated than Bitcoin, or even Dogecoin for that matter. By this logic, Ethereum is more susceptible to hacking than Bitcoin. (I think that this concern is valid. But it is also premature to completely write off entire cryptocurrency projects merely because they’re complicated.)

Nonetheless, a problem also worth discussing more is how decentralization and complexity don’t go very well together.

You can find me on Twitter @ramwithouthorns.