When faced with the question of why so many investors entered the cryptocurrency market two years ago, Angela Walch said this. Beyond the vast continent of mainstream society, there exists a small island of cryptocurrency that serves as a safe haven when the world is falling apart. But as the title of the Washington Post article where this quote appeared states, "As cryptocurrency goes wild, fear grows about who might get hurt," wild and hurt are two sides of the same coin, and the various crypto dramas that have unfolded over the past two years have fully demonstrated that the fear of "getting hurt" is not unfounded.
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Contents
Zero: The History of Decentralization: Goes wild, or/and gets hurt
One: Paper Reading "Deconstructing ‘Decentralization’: Exploring the Core Claim of Crypto Systems"
Can the concept of fluidity also serve as a cornerstone?
Veil of decentralization
Two: Paper Directory / Scholarship of Angela Walch
Welcome to the third article in the "Researcher's Study" series. Unlike the previous two articles featuring industry researchers, this one features a researcher from academia. The introduction of academic researchers in the Researcher's Study will focus on reading their influential papers.
The Researcher's Study is the first column of Uncommons' crypto research section, based on a community-built database of researchers in the field of crypto humanities from both industry and academia. Each time, a researcher is selected for an in-depth introduction, centering on the researcher and the issues they focus on in current topics such as crypto and other technological humanities.
What the study aims to answer is "WHY ARE THEY HERE in crypto," and based on this, provide real, human reasons for "WHY ARE WE HERE in crypto."
To co-build the study, please directly enter the Uncommons Community or contact @方庭 Fangting
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Angela Walch (this issue)
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Anonymous Peer Review Group: Cross-Pollination Community | UnResearch
All quotes in this article, unless otherwise specified, are from Angela Walch. The "Bookshelf" section will include links to the works mentioned in this section.
Zero: The History of Decentralization: Goes wild, or/and gets hurt#
“This is your safe haven; the world is falling apart.”
When faced with why so many investors entered the cryptocurrency market two years ago, Angela Walch said this. Beyond the vast continent of mainstream society, there exists a small island of cryptocurrency that serves as a safe haven when the world is falling apart. But as the title of the Washington Post article where this quote appeared states, "As cryptocurrency goes wild, fear grows about who might get hurt," wild and hurt are two sides of the same coin, and the various crypto dramas that have unfolded over the past two years have fully demonstrated that the fear of "getting hurt" is not unfounded.
Why are we here? This is both intuitive and theoretical. On the theoretical level, voices from academia, such as Angela's, provide very valuable resources for thought. Angela Walch is a former law professor at St. Mary’s University and currently works at the UCL Centre for Blockchain Technology, serving as an advisor to the U.S. Senate Banking Committee. She has written extensively on the social impacts of crypto technology and is active at the forefront of industry issues related to law, regulation, and governance. As an experienced researcher, she brings many past research resources and perspectives on "external power structures" (i.e., political, economic, legal, environmental, etc.) into the crypto field. Her relatively recent and influential discussions include:
"Deconstructing ‘Decentralization’: Exploring the Core Claim of Crypto Systems." Cryptoassets: Legal, Regulatory, and Monetary Perspectives, edited by Chris Brummer, Oxford University Press, 2019.
"Blockchain Governance: De Facto or Designed?", co-authored with Darra Hofman, Quinn DuPont, and Ivan Beschastnikh, in Building Decentralized Trust: Multidisciplinary Perspectives on the Design of Blockchains and Distributed Ledgers, edited by Victoria Lemieux and Chen Feng, Springer, 2021.
Among them, the first paper systematically sorts out the concept of "Decentralization" / "Decentralized" (as an adjective), proposing an analysis of the origins of decentralization, clarifying its usage context and nature, and even analyzing cases of power concentration in Bitcoin and Ethereum in the third part, comprehensively explaining this fluid yet foundational concept of blockchain from different aspects.
Can the concept of fluidity also serve as a cornerstone?#
In Deconstructing ‘Decentralization’: Exploring the Core Claim of Crypto Systems, Angela first analyzes the use cases of decentralization from three aspects:
First, it describes the network of computers (often referred to as "nodes"):
- Peer-to-peer connection network between computers
- Geographical distribution of nodes
- Strong resilience
Additionally, it can describe how power or institutions operate in permissionless blockchain systems:
- The cypherpunk and anarchist roots of Bitcoin
- Permissionless also means no single legal liability party
In the original text, Angela describes "complete decentralization" as follows:
Complete decentralization (whatever that means) is seen as one of the ultimate goals of permissionless blockchain systems, a utopia yet to be expanded.
The first scenario describes decentralization from the physical layer of computers, while the second scenario describes the central lake of decentralization from an abstract (and political) perspective. After Angela's analysis, she notes that in the mainstream usage of the term decentralization, political and physical meanings have already merged.
It is necessary to trace the initial use of the concept of decentralization in the industry. Angela takes Director Hinman's use of "decentralization" in a speech in 2018 as the conceptual roots of this term within the industry. In her summary, Director Hinman also defines decentralization from two aspects: one is the physically dispersed network, and the other must be difficult to determine or "see" the central party that plays a decisive role in the system. That is, it is a definition of how operations work within a specific blockchain system, focusing on whether there are more system-preferred participants.
Veil of decentralization#
No one can define the concept of a word because everyone uses language. From this perspective, the concept of "decentralization" is defined in a decentralized manner by all who use it. Language is the ultimate representation of power, a consensus shaped by history; the monopoly of semantics may be harder than a 51% attack. Angela attempts to "besiege" the conceptual boundaries of the term decentralization from several angles, summarized as follows:
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No one knows what decentralization means;
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Satoshi Nakamoto did not invent decentralization;
- Echoes from the early internet;
- Literature on digital governance from 19 years ago [1]
- Decentralization does not equal distribution;
- Decentralization: controlled by different aspects
- Distribution: parallelization, but still may rely on a central coordinator
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Decentralization exists within a certain range (limited);
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Decentralization is dynamic rather than static, ideal rather than real;
- Volatility of the degree of system decentralization
The critical takeaway here is that any measurement of decentralization is obsolete immediately after it has been calculated. In a permissionless system, anyone can join, and no one has to stay, so the system’s composition is, in theory, always in flux.
“The important insight here is that any measurement of decentralization becomes obsolete immediately after it is calculated. In a permissionless system, anyone can join, and no one has to stay. Therefore, theoretically, the composition of the system is always changing.”
- Decentralization can be used to hide power or facilitate rule-breaking behavior.
Here, Angela refers to decentralization as the "Veil of Decentralization," a decentralized "veil." This veil contrasts with the "corporate veil," but what the corporate veil cannot obscure is a responsible legal entity or liable party, while under the veil of decentralization, there is nothing beneath this veil. The decentralized structure equally dilutes responsibility; no one can take on higher-level tasks within this structure, and thus, "Law has no reason to reach into such a system, as there is no relevant human behavior to direct" — the law cannot find any actionable tentacles within this system; it is too slippery to grasp any relevant human behavior as an object of enforcement.
The uncareful use of "Decentralization," without clarifying concepts, is quite misleading for understanding the power structures of blockchain. In the paper, Angela provides many examples of power concentration existing within blockchain systems, as well as the fact that a few important updates are driven by a small group of core coordinators, etc. (as discussed in the third part of the paper), correcting the public's absolute, romanticized, and irrational impression of "decentralization" through real cases from the history of Bitcoin and Ethereum blockchains.
In the final paragraph before the Closing Reflections, Angela writes:
My argument is that unquestioning use of the term ‘decentralized’ and the romanticization of ‘decentralization’ helps to create, sustain, and spread false beliefs about blockchain power structures. In other words, the Veil of Decentralization strikes again.
My argument is that uncritical use of the term "decentralized" and the romanticization of "decentralization" helps to create, sustain, and spread false beliefs about blockchain power structures. In other words, we see the veil of decentralization once again.
Rescuing the term "decentralization" from the conceptual veil is a political task for blockchain. This is achieved through the efforts of Angela and related scholars, as well as in the substantial use of it by every industry worker. Words do not merely signify a tool; they are the ultimate pointer that anchors value in a coordinate system.
[1] Attached literature on digital governance prior to the writing date of the paper (2019) for readers who need to look it up:
Finck, Michèle. Blockchain Regulation & Governance in Europe, 2018.
Carter. Title of Carter's work. Source of Carter's work.
Walch, Angela. "Open‐Source Operational Risk: Should Public Blockchains Serve as Financial Market Infrastructures?" Handbook of Blockchain, Digital Finance & Inclusion, edited by David LEE Kuo Chuen & Robert Deng, vol. 2, 2017.
Atzori. Title of Atzori's work. Source of Atzori's work.
Two: Paper Directory / Scholarship of Angela Walch#
Publications are available at https://ssrn.com/author=1031367
Blockchain Governance: De Facto or Designed?, co-authored with Darra Hofman, Quinn DuPont, and Ivan Beschastnikh, in Building Decentralized Trust: Multidisciplinary Perspectives on the Design of Blockchains and Distributed Ledgers (ed. Victoria Lemieux and Chen Feng), Springer (2021).
Deconstructing ‘Decentralization’: Exploring the Core Claim of Crypto Systems, in Cryptoassets: Legal, Regulatory, and Monetary Perspectives (Oxford Univ. Press, ed. Chris Brummer, 2019).
Contributor to Michel Rauchs et. al., Distributed Ledger Technology Systems: A Conceptual Framework, Report from the Cambridge Centre for Alternative Finance, August 2018.
In Code(rs) We Trust: Software Developers as Fiduciaries in Public Blockchains in Regulating Blockchain. Techno-Social and Legal Challenges, (eds Philipp Hacker, Ioannis Lianos, Georgios Dimitropoulos & Stefan Eich), Oxford University Press, 2019.
The Path of the Blockchain Lexicon (and the Law), 36 Rev. Banking & Fin. L. 713 (2017).
Open Source Operational Risk: Should Public Blockchains Serve as Financial Market Infrastructures? in Handbook of Blockchain, Digital Finance, and Inclusion, Vol. 2 (Elsevier, David Lee Kuo Chuen and Robert Deng, eds., 2017).
The Bitcoin Blockchain as Financial Market Infrastructure: A Consideration of Operational Risk, 18 New York University Journal of Legislation & Public Policy 837 (2015).
Crypto Miners as Intermediaries (in progress).
Blockchain Emergencies & Open-Source Software Governance: Is ‘Rough Consensus’ a Suicide Pact? (in progress)
Communication Problems & Systemic Risk: How Imprecise Language Could Taint System-Wide Decisions on Blockchain Technology (in progress).
Locating “Process” in Cryptoeconomic Systems (in progress).
What is Public Information in Crypto Systems? (in progress).
Rethinking Digital Assets as Commodities (in progress).
Systemic Resilience & Chartalist Theories of Money (in progress).
UnResearch, Understanding
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