1 min read

What's the point of decentralization?

Continuing the discussion (part 1, part 2) with Jonathan Stark, Jonathan asked (shared with permission):

The thing that is unclear to me is what we as users would actually gain by having apps run on a bunch of hackers' computers instead of on a bunch of Amazon's computers.  ​
It's a neat trick that a certain type of developer might find fascinating, but will the vast majority of end users give a crap?

This is probably the most important question we can ask about blockchain. Why should anyone care? If you look at bitcoin, it's a neat innovation that a lot of people seem excited about, but what is it good for? E-money on a distributed network seems to solve some real world problems (and introduce others), but why does it have to be bitcoin? Why not some other implementation of the same idea?

Bitcoin is popular because it was the first. Name recognition and a limited supply creates demand. Beyond that, the use cases for bitcoin are limited. Ethereum improves on the utility by adding smart contracts, but Jonathan is right--why should we care?

Blockchains are a way to build financial incentives directly into the backbone of the web. YouTube has fairly generous pay outs for video creators, but YouTube is collecting a lot more money than they're paying out. If creators moved to a decentralized platform built on blockchain, they could collect much closer to 100% of the value they create (much better for someone just starting out who needs a certain amount of income to survive).

On blockchain, you own what you create. You own your data. There's no large company harvesting your data and selling it to the highest bidder. On other general purpose blockchains, you have to pay a fee to play, but Koinos offers fee-less smart contracts. That's the key to making blockchain accessible to the little guy.

There are other valuable use cases enabled by blockchain--what's your favorite? Hit reply and I'll address it in a follow up.

More tomorrow,


P.S. Episode 5 of the Koin Press podcast is now live! This week, I talked with Julian Gonzalez about building on Koinos. If you're curious about creating apps for the blockchain, take a listen.