Composition of the Metaverse: Decentralization Layer
Part 4 of 8. For a brief intro about this blog series, read What is the Metaverse. Check out each Metaverse layer: Infrastructure, Human Interface, Decentralization, Spatial Computing, Creator Economy, Discovery, and Experience.
"Once people begin to understand that Web3 empowers them to own their data, their follower counts, their customers, and the value they accrue online, and then take it with them, the "Web 2.0" business model is no longer attractive or sustainable." -Justin Sun
What is Decentralization?
Blockchain technology, smart contracts, open-source platforms, and the potential for self-sovereign digital identities are all examples of decentralization.
A fundamental property of decentralization is that it allows for permissionless participation. This grants access to an unbiased environment that fosters innovation and competition, as there is no need for a gatekeeper or prior approval to participate. The significance of competitive markets is that they provide alternatives for consumers and developers, while generally maximizing resources by producing products at minimum cost.
Hallmarks of Decentralization
Overall, decentralization involves the distribution of control, peer-to-peer interaction, and open and inclusive participation–making it a more robust approach to organizing and managing systems due to its resilience and redundancy.
Distributed control: in a decentralized system, power is distributed among multiple actors rather than centralized with a single authority. Expanding control across many parties contributes to the decision-making process, and distributed ownership allows numerous parties to own and control different aspects of the system. The importance here is that proper controls reach consensus in a democratic method.
Peer-peer interaction: decentralization ensures actors interact with each other directly rather than going through a centralized intermediary. Interactions can involve exchanging information, resources, or value without needing a gatekeeper to facilitate the exchange.
Open and inclusive participation: decentralized environments allow for open and inclusive participation, meaning that anyone can participate without the need for prior approval or permission from a central authority. Removing barriers to entry can lead to increased diversification within groups of participants, which increases the resilience and robustness of the environment.
Redundancy and resilience: decentralization increases stability, as no single point of control or small contingent of influential actors (Think Alameda and FTX) can influence a system in its favor. Instead, the reliance on distributed peer-to-peer interactions makes it more difficult to manipulate or disrupt interactions. Corruption is squashed in a decentralized environment, as the exchange of information, resources, or value is constantly held in check through the distribution of participants/systems that can conduct constant audits for all to examine, promptly exposing corruption and malice.
Censorship resistant: a decentralized metaverse would be less vulnerable to censorship, as no central authority has ultimate control over system exchanges or the ability to block users from participating. Anti-censorship helps ensure that the Metaverse remains a free and open platform for communication and expression. Currently, we are seeing centralized censorship unfold on Twitter via the release of the “Twitter Files.”
Why Is Decentralization Needed for the Metaverse?
A centralized or closed metaverse similar to what Meta is attempting to build out would grant control to one of the wealthiest corporations and will be more dangerous than the most creative dystopias yet conceived. Privacy, choice, costs, and innovation will likely be the primary victims. We have become accustomed to this with current tech giants such as Apple and Google. Specifically, “Developers are, of course, already complaining about Apple’s decision to require a 27% commission on sales made through its App Store—even though only one category of app is currently included."
Most of all, a decentralized system ensures that the majority of consumer concerns and desires are respected, not those of a controlling class representing a minority. Interactions with each other and participation in the virtual world are more democratic and equal rather than subject to a centralized authority's rules and policies. This type of Metaverse is currently in existence or being built, such as Decentraland, The Otherside, and Sandbox.
Imagine a corporation or centralized entity controlling the whole Metaverse. This situation would create infinite opportunities for the controlling authority to analyze all user activities within the Metaverse and use the resulting data at their discretion, since access to this data would be unabated. If information is stored centrally, it would be difficult for regular users to verify who has access to it and under what conditions. Accessing the behavioral data of unique and identifiable users could lead to security issues, which would in turn disenfranchise participants. This situation creates asymmetric business exchanges of information which usually happens when one party is taking advantage of another party.
Final Thoughts
A single unifying build-out of the Metaverse is not likely, as even decentralized entities will seek specific use cases. However, Metaverse developers must ensure interoperability within as much of the Metaverse as possible. Fluid movements and transfers of ideas, information, and payments will ensure higher adoption and engagement. No one ever says that using 27 different passwords/profiles and three device chargers is fulfilling and efficient. Also, remember that utilizing centralized systems as a guise of decentralized interoperability among environments is not the answer; note the LastPass debacle that is unwinding in late 2022.
Our 8-part blog series on the layers of the Metaverse:
