How Decentralisation Could Fix Digital
On top of a decentralised infrastructure, centralised control achieved a major comeback. Network effects and economies of scale are both strong drivers towards a digital platform economy dominated by only a few players. Digital is broken. Can decentralisation fix it?
The ginormous success of the internet and digital technologies is commonly attributed to their decentralised nature. This allowed for quicker and ultimately more growth of the network, because lots of different approaches could be tried and tested simultaneously. Centralised authority and control was limited to a few basic cases, like domain names (DNS) and IP addresses.
Fast forward to 2018, and we see a very different picture, with an oligopoly of five companies (Apple, Amazon, Google, Facebook and Microsoft, not to mention Tencent and Alibaba) controlling huge chunks of our digital lives. On top of a decentralised infrastructure, centralised control achieved a major comeback. Network effects and economies of scale are both strong drivers towards a digital platform economy dominated by only a few players.
Digital is broken. Can decentralisation fix it?
Well, it depends. Decentralisation itself is an abstract concept that can be implemented in a lot of different ways. Technologists think of decentralisation differently than, say, business people. Blockchain technology, for example, took off because it appeals to both. It is radically decentralised from both a technological and a business point of view. To be a real success, now only the user experience (UX) needs to be figured out.
Just as an aside: In our digital age, there are three major success factors – technology, user experience, and business model. In the past, many successful products started with only two of them, technology and user experience, figuring out the business model later. These days, that approach is becoming increasingly harder to pull off. At least if you aim for more than a sell-off to Apple, Amazon, Google, or Facebook.
At least three of the big guys derive their power from ownership of data. This insight leads to the separation of data and applications: Users should own and control their data, not arbitrary corporate behemoths like Facebook. The post-GDPR world will probably take a huge step in that direction.
But how can this separation be implemented? No one less than the inventor of the web, Sir Tim Berners-Lee, has a project called Solid up and running that tries to do just that, while adhering to the open standards of the internet and the web. In a Solid world, I wouldn't store my social graph and all the other data on Mark Zuckerberg's servers, but somewhere else, giving Facebook only limited access.
A similar project is Blockstack, using blockchain technology as technological foundation. It comes with its own Blockstack browser and stores data on your local device as well as in the cloud. Blockstack's appeal may grow after May 25, when GDPR goes into effect. The EU data protection regulation can give a huge boost to projects and products like those. What so far was a disadvantage – not storing data of your users – will suddenly turn into an advantage.
In effect, this turns the web's centralisation inside out. The internet would transition towards a data-first model, rather than its current service-centric approach. Your data would become the most important element, a principle apps would be required to respect.
Again, this approach looks promising from a data protection perspective. And also from a decentralisation perspective. Since data is the new oil (or not), it is highest time to increase pressure on the data giants of our days. Remember when the internet put pressure on the early online services?
Walled gardens like AOL or CompuServe services were forced to add internet access to their service, only to extend their lifetime for a few years. In the same way, Amazon, Google, and Facebook could be forced to adopt a data-first model, allowing users to store their data wherever they want, and to easily move it (portability).
It remains to be seen whether market competition, technological innovation, government regulation, or social responsibility will be the major driving force behind this shift to decentralisation and data-first. But the overall trend to take back ownership of data is growing stronger. And GDPR is an important part of that.