Why Decentralization Matters

#saplings

Decentralization protects a platform’s market participants (e.g, businesses, creators, developers) from exploitation by the platform.

A pattern of cooperation followed by intense competition, exploitation, and extraction is common for centralized platforms on the Internet. This ends up hurting the end user because they, in theory, receive a lower quality service, pay more, and have less options.

Regulation is effective for centralized platform monopolies that create hardware (telecom, phone, radio, tv) but less necessary for the Internet (software stack) because it can be rearchitected

Assuming that users are smart, a rational entrepreneur will decentralize a new network that she is building when the locked-in effects for her users are high

Decentralized platforms win because unlike their centralized counterparts they don’t exploit users and they don’t bait and switch builders and creators

Blockchains make commitments that protect stakeholders from common Web2 risks

Dangers of building and using centralized platforms

Tangible Resource: Arbitrum’s Strategic Priorities