Decentralization refers to the distribution of decision-making power from a centralized entity to a distributed network of entities. This is a common theme within cryptoeconomics and blockchain applications.
There are a number of different technologies that can help with the functional decentralization of the metaverse space. Some of the most prominent examples are:
- Distributed ledger technologies (DLTs)
- margin calculation
- Micro-service management
The level of decentralization can vary depending on what is distributed and how it is distributed within a system. This will differ within specific organizations or companies versus critical infrastructure and networks.
Many metaverse protocols within the crypto-economy (Decentraland, The Sandbox, etc.) uses a type of distributed ledger technology (DLT) called a blockchain. However, not all DLTs are blockchains. This leads to a high rate of variation in terms of decentralization, even if the system itself is distributed.
For the metaverse to truly flourish and remain accessible to all, it must be a highly decentralized system without any gatekeepers. This is what has allowed the internet to grow into a unique, highly engaging, globally accessible interface.
Centralization raises several issues for a global-scale system. Consider the Internet – the wealth of exchangeable information is invaluable to mankind. Almost anyone can access the internet and receive a high level amount of information on any topic.
Of course, there are some major shortcomings in this regard that have become increasingly apparent in recent years, including the monopolization of key web infrastructure and unequal, centralized access via Internet service providers.
This is the biggest problem that web3 is trying to solve. A centralized global space leads to:
- Higher rate of monopolization
- Greater censorship
- Lack of accessible information
- Reduce user privacy
What is the difference between distributed and decentralized systems?
A common misconception is that distributed systems and decentralized systems are interchangeable terms. This is not really the case – while decentralized systems (ie blockchains) are a type of distributed system, not all distributed systems are decentralized.
In addition to blockchains, here are three other examples of DLTs:
- Hashgraph
- Directed Acyclic Chart (DAC)
- holochain
Distributed ledger technologies
At its core, a DLT is a cryptographically secure record of consensus with a verifiable, validated route. That route is validated by a network of nodes. A DLT network can either differ in its level of decentralization. Designated rights on the networks between nodes can fall in a range from centralized to decentralized, which means that not all nodes on the network have to be equal.
Certain nodes on a distributed network can have much more prominent permissions than other nodes. For some organizations, this is beneficial as it enables greater participation in the network without the organization having to relinquish control.
Blockchain networks
In comparison, a blockchain consists of immutable data pods referred to as blocks. These blocks are authenticated by nodes on the network and added to the previous chain, which serves as a specific way to implement a DLT.
The most important distinction between blockchains and other types of distributed ledger technologies (DLTs) is that within a broad DLT network, each node does not necessarily have all the information of the ledger. For a blockchain network, every single node has access to all the information from the ledger.
This is an important distinction to keep in mind when considering external companies such as Meta and their own ambitions to expand a metaverse space. In Mark Zuckerberg’s 2021 founding letter, he explicitly states that privacy, security, open standards and interoperability should be “part of the metaverse” from day one, but offers no direct insight into how Meta will provide these features in its own product. not.
For the purposes of decentralization and interoperability, it is extremely important that each participating node on a DLT network has access to and understands all the available information. It promotes the highest degree of transparency and participation needed to achieve a robust, decentralized, metaverse space.
Conclusion Analysis
It is important to counter the narrative that simply being distributed equals decentralization. This is completely untrue. The metaverse must be distributed AND decentralized to promote the healthiest possible space for the world to build on. This applies to both individuals and brands / businesses.
Web3 and the emerging metaverse have some challenging obstacles ahead to ensure that this vision becomes a reality. Examples include censorship and accessibility issues due to centralized Internet service providers or simply the cost of building innovative computer technologies to truly power such a demanding system.
Nevertheless, what is highly achievable today is the implementation of decentralized distributed systems that allow for the free flow of information to anyone who wants to participate. This is what blockchain technologies are contributing to the emerging metaverse.