Episode 027 - Decentralize all the things
Decentralization is the key to survival both from a human population perspective, but also and probably more importantly from a financial perspective. In this episode we talk about why decentralization is critical, we celebrate crypto-currencies such as Bitcoin and how decentralization survives the greatest human challenges.
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References on this podcast episode
The Starfish & the Spider - The Unstoppable Power of Leaderless Organizations
As I record this episode, there are 7.3 billion people on planet earth. Some would argue it is closer to 8 billion. Our population has literally doubled in size since the day I was born and with this comes challenges for resource management and distribution. As more of the world’s population grows in regions that will consume rather than produce, it places a huge burden on everyone to fit in, and not kill each other in pursuit of resources needed for survival.
Our human history has been one of travel, exploration, conquer and migration. In the United States, most people are not of native origin. They came here from western Europe or Latin America. And those that came from Latin America probably came as a result of Spanish conquest and migration. The fact is that we move around a lot.
A popular thing these days is for people to use sites like Ancestry.com or other DNA analysis tools to look to their own personal DNA to try and determine where they came from. It is hard because we have migrated since the dawn of time. I watched a BBC documentary many years ago about this, showing that the earliest sign of human life was in Namibia, Africa and traced the migration path of people from there through the northern deserts of Africa, into Europe and splitting to Asia or western Europe. It is fascinating to see how, as we have increased population in the human race, that we move to where food and climate is more hospitable and we settle before moving on again. The human race is truly decentralized because we’ve gone to where the resources are.
Although we probably all share more in common than we differ due to our national heritage, we are still tribal. We migrate in groups because we can better fend off adversaries. Other species have been able to survive and thrive because of their ability to work as teams - wolf packs are a perfect example of this. But no better species does this than humans. The concept of being able to outflank an adversary typically results in successful hunting, and by taking down a cow, it can feed a village, so why not use the power of collective skills to do that. Everyone wins.
Yet there comes a point where collective size has a negative effect. We’ve all come face to face with the dysfunction of government or the “Dilbert Zone” in corporations. Where the mission is lost in the huge population of participation. The original founders of something had a great vision and were able to evangelize it to their teams, but eventually their success required bigger teams and eventually it just breaks down. Most corporations have a lifespan of 30 years before they become inept and unable function effectively - only to be destroyed by a competitor who is at a younger stage in their evolution. This is the way of life really. The old can’t compete with the young. It is why race car drivers end their careers at 38 years old because they can’t compete anymore.
But those that are addicted to the comforts of not having to be involved in “the hunt” anymore, have risen to levels of power where they delegate the actual work to their subordinates and spend more time on the golf course than the office lose touch with reality. It is why a common technique in business was to have the upper management spend at least one day a month on the shop floor of their enterprises, so that they don’t lose sight of why the hell they are there. Unfortunately this happens far less than it should.
The result is that in order to survive, the mega large organizations become good at buying out the threat of the younger organization. They become entrenched, kill off their threats and we, the consumers, have little or no choice anymore. The promise of a true “free market” is lost as these mega-corporations build relationships with political power to further allow them advantage and to further guarantee that they will spend less time on their actual mission and more time just being huge. At some point, they destroy new innovation because no one can see a valid point in trying to compete and then things just start to grind to a halt.
In history many have attempted to fight off the empires and most failed. These somewhat pointless empires just wanted to consume more resources but had no real mission other than to just keep consuming. The Roman empire did this until they had no real idea why they existed. The same is true of the British empire, who eventually realized that the cost of maintaining all of their acquisitions and fighting to keep or grow them had a negative yield. Same with the French and same with the Spanish.
The Spanish, however, have an interesting history that we can learn so much from in life. Particularly if you isolate one region - Mexico. I’ve spent a lot of time in Mexico and I love it there. Maybe it is because I can see history right in front of me there, and the people are so nice and welcoming. But one of the biggest lessons I’ve learned is from the Spanish conquest and how it worked.
Hernan Cortez invaded Mexico in 1519 under orders from Spain. At that time, Mexico was being ruled by the vicious Aztec empire. Aztecs were not respected or welcomed by most in Mexico, and when new conquerors came with gunpowder and Catholic ideology, it didn’t take much to garner some support with the locals. The problem, however, was that although the Spanish were successful in locating the King of the Aztec empire, Montezuma, and killing him thereby allowing the rest of the country to fall to them, they also had the power of European disease with them. They brought smallpox to Mexico, reducing the population from 25 million to 1.2 million quickly. This allowed them to conquer and yet had enough population to rebuild the massive churches, towns, buildings, roads, bridges, and exploit the land for gold, silver, and other valuable resources. They effectively overwhelmed the population so that today we often refer to Mexico City as “New Spain”.
Meanwhile Spain continued to invade central and South America, doing much the same south of Mexico all the way to the bottom tip of Argentina and Chile. This methodology worked as they forged further into other places to conquer and claim in the name of Spain.
But when they attempted to go north from Mexico into what is now the United States, they came face to face with something that they didn’t expect. A decentralized army and they failed to conquer and retreated.
This tale is best depicted in the book “The Starfish and the Spider”, which came out in the early 2000s. It shows the power of a decentralized force vs. a central one. Remember, Cortez conquered Mexico because he found the King and killed him. The rest of the country fell into his lap. A single point of failure. But when his armies moved north, specifically into regions such as Sonora or New Mexico or Arizona, they came face to face with indigenous tribes of native Americans, which were organized around a more decentralized model.
The Apache tribes consisted of smaller groups of people - small decentralized communities. But there were many. They were spread over a vast area. They developed cooperative protocols between the tribes so that they could communicate through messengers. This “network model” of tribes meant that when the Spanish attempted to seek out the center and conquer it, there wasn’t a center. They might be successful at overwhelming a single tribe, but the protocol of communication and the messenger(s) were dispatched to other tribes that would rally in support, and out flank the Spanish. Everytime they thought they wiped out a tribe, another would pop up out of nowhere and attack. To the Spanish, it was like playing a “Whack-a-mole” game, and eventually the costs and resources needed to fight this kind of war depleted them so much they had no alternative but to retreat.
There is evidence of this all around Arizona where I live. You see Missions from the Catholic church in various places, but often they are next to tribal reservations. I know of one just south of Tucson, Arizona where the Spanish mission is there in beautiful white limestone, but to get to it you go through the native American tribes who will sell you Fry Bread, etc. in the parking lot. Eventually everyone had to learn to live together, but it shows that centralized large organizations are weakened when their center of power is destroyed, but a truly decentralized network of “nodes” that form the entire population, as long as their protocol of communication is solid, are almost impenetrable.
Consider the Internet. This technology was developed as a way to combat the threat of nuclear war and destruction. DARPA were tasked with developing a communication protocol that is much like the Apache tribes. They needed a way that electronic communications can be sent to the eventual destination, but if any node on the way is destroyed, the protocol was smart enough to route itself around the node and find a different path. TCP (transmission control protocol) achieved this and after proving itself, and eventually the threat of the cold war disappeared, they gave the techology to academia who then used it to interconnect universities for shared collaboration, and eventually it was given to the people and, well as you know the rest is history. Consequently you are listening to my podcast.
The thing is that if this was a centralized protocol, you know that some big mega-corporation would have tried to steal it. That might have been AT&T, Microsoft, Novell, etc. All the big players at the time would have done anything to get ownership of the Internet and if they had done that, we would not have the Internet we have today. Imagine if a single mega corporation or government controlled it. That’s a horrible thought.
You see, decentralization matters. You can’t kill a decentralized organization. If you attack it in one place, it will just pop up in another. The USSR learned this the hard way when attempting to conquer Afghanistan and that eventually led to the destruction of their empire. The costs of lives and money needed to support such a conflict against decentralized tribal warlords doesn’t work - even if you are the #2 super power on the planet. The same is true of the USA experience in the region, as it also has been in regions like Iraq, where tribal decentralization is also common. You’d think that the USA would have learned this from Vietnam as well, but no - the arrogance of massive centralization and its dysfunction is hard to get passed and it seems that the power of decentralization never allows any empire to win a war against it. Maybe they can win the odd battle, but never the war.
So let’s look at this from financial sustainability and how you can choose to use the power of decentralization to your advantage. First, what have we learned here...
- 1. That a decentralized collection of nodes is far more powerful and adaptable than a centralized organization
- 2. That the thing that keeps it working is a solid protocol of communication between the nodes
- 3. That there is an inherited level of trust, by way of previous agreement, between the tribes or nodes, so that they are willing to work together collectively
- If we know these things, where can we find this model and how can we find advantage from it?
In 2020, the most noteworthy example of this model is to leverage the power of the Internet and look to the invention of “blockchains”. Blockchains represent an agreed upon means of trust (ie. item #3 above) as a transparent and accepted “ledger” of things. As long as a blockchain is not centrally controlled and that the content of the blockchain has been agreed to be unable to be changed and represents truth, then we can use this for many purposes.
The easiest and first application of this has to be financial. A “ledger” or simply a way to record things that everyone agrees is truth and cannot be changed, means that we have a way to agree to history. If we do this, then we take away fake information and perception because the truth is accepted. And this is the backbone of the invention of Bitcoin.
Bitcoin is the “chicken or the egg” scenario. It invented Blockchains as a way to have a decentralized yet immutable truth of things and is based on distribution and decentralization. By putting transaction records of value transfer in a blockchain, you have the equivalent of a banking system. Everyone agrees that they hold ownership in something, it is recorded that they do, and it cannot be disputed. That the thing they hold ownership in has a value determined by scarcity rather than a value that can be diluted by Fiat - the order that something be decreased or increased in value by a central authority. And that by having scarcity, the increase of interest and use in that thing of value varies not based on Fiat but based on supply & demand - the free market.
On the surface, this is huge and powerful. As long as you can guarantee that there isn’t a central point of failure in this model, you have the power of decentralization like the Apache tribes, and you meet item #1 in my list. As long as you all agree to the protocol to use it, you meet #2 reason in my list and that is the BTC protocol itself.
So there you have it. We have a solution for a new form of money and it returns control back to the individual rather than some dominant central authority. What a wonderful thing.
But why is it that it hasn’t taken off as the “new money” for the world?
Simple. Big centralized mega-organizations, whether they be private or public sector, don’t want to change the status quo. They like the fact that they can perpetuate the truth that they want to sell to the public. They like the fact that they are all powerful and can rule by Fiat rather than by performance. They realize that they don’t even need to be popular anymore to wield power. The popularity of US congress for example is below 20% and yet it isn’t going anyway anytime soon.
The citizenry become lazy and follow habits rather than wanting to participate in real change. It is only when that change is simple and not a burden to adopt that they will do this. Right now, the world of crypto-currency hasn’t permeated into society at a level that meets the needs of the population vs. the convenience of someone taking out their credit card and spending money at the store. Until it is as available, it won’t be adopted for regular trade. And the worst part about this is that the banking industry has been able to swindle all of us into spending someone else’s money for the things that we need everyday - the percentage of transactions done using a credit card vs. a debit card demonstrate that most of society is willing to sell its future earnings rather than spending its current assets. It prefers to generate liability than to deplete assets, which is why 78% of our society are living from pay check to pay check and any disruption (such as an unexpected car or medical bill) would derail them to a point few could recover from.
You see how this plays into the entire ruleset that we at beunconstrained.com preach against. The fact that people take on debt they can’t afford to buy things they don’t need and become enslaved to those very mega-organization is by design. It isn’t an accident because until you understand the power and vulnerability of larger, centralized organizations, you realize that either you get consumed by them or you make a concerted effort to avoid that.
I would normally be fine to just being consumed by “The Borg” here. Resistence is futile as they say. But that would be the same as the Apache Indian tribes just giving up to the Spanish. Or any other conquerors that attempted to steal their land & resources. In the same way that the Afghan tribes have been able to withstand empires throughout their history. If you have something of value, you have to be willing to fight to keep it or you will just be consumed by someone else and now you are their slave.
So in this world of trying to break free of being consumed, and become your own sovereign citizen, in which you make your own rules - whether that be not working for some employer or selling your future out to a bank, etc. the art and understanding of decentralization is the only solution. And this is written in history.
Think of decentralization as a philosophy rather than an answer. It doesn’t give you any specific solutions you can use today. But if you evaluate your participation in the world based on understand it, you will find that you may be able to fight against being consumed by the world. And we all know what happens when we succumb to mega-corporations that consume us.
The one thing of power in decentralization that is being used against us is communication protocol, specifically the Internet. For those that remember back to 1995 and the emergence of the Internet, what it represented was the individual’s about to express, communicate and trade. Yet today it has been overrun by the very same corporations that used to control the protocol. Remember back to the day when the only TV media was on over the air reception or cable TV? The cord cutters came through that model to try and find a more decentralized model that allowed individuals to save huge amounts of money each month. But what did the mega-corporations do in response to it? Well Google took the very same Internet that was supposed to be given to the people, and put their own media distribution on top of it. YouTube and YouTube TV dominate Internet traffic. Sure, other players have done the same - Netflix, Hulu, Sling, Amazon Video, etc. Even Disney are getting into the act. It seems that they don’t understand that this is a medium to empower decentralization, but are using it to force you onto their platforms and centralize content again.
When smart people invented Napster or BitTorrent, the mega corporations fought this with their own streaming services. Spotify, Pandora, etc. put the record labels out of business or at least took their dominance of silver plastic disk distribution - ie. CDs. and used the very same Internet of the people to distribute content to the people and force themselves to be a one stop shopping experience rather than an experience of discovery.
It used to be that you could find anything you wanted on the Internet, but in order to get found you had to register your site with search engines. Google became the #1 site here, and with that the Trillion dollar Google corporation emerged. They became the troll on the bridge that you had to pay in order to have access to the bridge. Not for the regular folk that wanted to pass through, but for the small, medium and large businesses that wanted to garner their attention. The ongoing costs of SEO, “Cost per Click”, Adwords, etc. has taken the advertising budgets of businesses and directed them to Google or Google affiliates. Now it is next to impossible for a small business to establish and grow without a deal with the devil that is Google.
And the ultimate example of audacity with this is Facebook. Facebook realized that finding content on the Internet required a search engine, and that creating a website in order to have content required skills. So they took a page out of the old American Online model and created a site that any grandma or grandpa could publish content on, didn’t need a Ph.D to do it and then controlled the attention. By pretending this was about “connecting people” simply diverted attention away from the centralization model they were creating. And that by charging people to have some advantage on their platform, they could make billions in revenue. Again, this is simply centralization trying to take over. And with that comes their ability to fight against any threat to that model.
The Internet has simply become an easy to illustrate example of how centralization always tries to overrun decentralization. But many are still fighting back, and often the best tools they have to do this are blockchains. Sites like Flote.app fight the Facebook dominance, dTube & Bitchute fight against YouTube, dLive fights against Twitch, dSound fights against Soundclound & Spotify, etc. What do they all have in common? They are blockchain based.
To the average user, they are no different to the URL they type in to go to Youtube or something like that. But as we watch more content on mobile devices, set top boxes, etc. those blockchain based sites have some work to develop the apps that we need to make them seamless. I helped the developer out of the dTube Android app, making it work properly with Android TV boxes, and as a result I can watch that content on my Nvidia Shield as easily as the YouTube app. But the content isn’t being monetized and that means content providers are choosing not to publish their content there as much.
The thing is that end users to flock to content if the content is of quality and rich. The blockchain based services have the ability to monetize content since they can use the same methodologies for that content as Bitcoin, etc. So you’d think this would make sense and more people would migrate to these more “open source” platforms, but it is now about habit. Since everything is on YouTube, that’s where the content providers go. And the circle is completed because that is where the advertisers go, and that is where the viewers are.
One could be make the exact same argument for banking. Banking really should represent the savings & loans marketplace, but it has become far worse than that. It has grown to be more powerful than most governments, and they pretty much make their own rules. They control your lives because you are forced to use them in some fashion. Thankfully there is a lot of diversification in banking, but they have an unholy relationship with government. The same governments depend on private banking to fund their own projects and, like their citizenry, have become indebted to those same banks. The interest payments are paid to said banks and that forms the bulk of the income taxes we pay to our governments. If we were to distance govt from banking, we could have less financial obligation to our governments. But that isn’t going to happen. Any attempt to do that seems to be doomed from the start, with few congressmen & women willing to even raise the specter of national debt as a talking point. So they just keep spending more than they make, and we all eventually pay.
It is no different to how we as individuals live our lives though. The snazzy TV ads for the banks that market new “products” designed to enslave us means that we have to embrace it and find a way to live with it. You can’t rent a car without a credit card. You can’t get a hotel room, you can’t buy a plane ticket. It is an inconvenience to pay cash at the grocery store bypassing the self-check out systems and having to stand in line for 10 minutes for the checkout operator to attend to you. You are the exception with cash - the annoying customer that takes too long. Remember what it was like when someone in front of you at the checkout wanted to pay with a jar of quarters? We would all cringe at that - some vendors would send them away, despite it being illegal for them not to accept government issued currency in any form.
Centralization over money has turned into digital centralization, where governments can use financial ledgers to track behavior. Just as Amazon seem to know exactly what you need before you do, governments want the same power. The power to control your movement, extort your earnings, define your life’s path, demand your allegiance. We’ve created a dumbed down society in the USA that only thinks that their rights are what was written into a constitution, yet never considers that their right to eat what they want, put whatever drugs in their body, travel to where they want to go, choose who to have as friends, spouses, etc. are not theirs. We’ve created talking points that pits one tribe against another because that’s how centralization works. Like the Spanish conquerors learned, you can’t defeat a decentralized tribal model, as long as the trust and means of communication between the tribes is strong. But if you destroy trust between tribes, then you have an easy target. One will never come to the defense of another. And if you take over the protocol of communications between the tribes, you can distort the message between them making them innefficient and subject to battle loss.
If you understand this, you understand the risk & reward model. I get annoyed when I talk to Bitcoin evangelists that don’t really understand the spirit of what is going on. Sure, they get the technology and they often get how evil Fiat currency and banking is. But they have no real understanding of the level above that, and that is central vs. decentral control. If they did, they might have won the war for crypto-currency by now.
I do believe that eventually they will prevail. But it comes down to embracing the power of decentralization and protecting the core tenets of decentralization. The longer we can hold out with that, the more likely we will prevail.
So how does this work for someone who wants to be financially unconstrained?
Now you understand a bit about centralized vs. decentralized, you can probably see how this has massive impact. You want to detach from the social norms of centralized banking because you don’t want to sell your future to them. You want the freedom to not have to work 40-50 hours a week at a job you hate, where you feel more like a wage slave than a valued contributor to a cause you believe in. Yet you can’t leave because you sold your future out to the banks by way of a mortgage, credit card debt, car loans, etc. Or if you managed to not do that, or fixed that issue, you are now working piling away money so you can retire early or some other fiction. Because you drank the Koolaid of the FIRE movement, which really just found a way to try and hack the centralized model, but they didn’t realize that you giving all your money to a Wall Street index fund or some other such fickle creature means you lose it all if they go down. And they do. Just ask Bearn Stearns or Lehman Brothers.
The secret here is to detach. You are entitled to keep what you earn. But if you didn’t need that much to live a rich life, then why not find a way to embrace that? If you lived away from the big city where you become just another pawn on someone else’s chessboard, it is not only cheaper but you gain the advantage of being decentralized. Sure, you have to do a lot more stuff on your own. But that’s ok. Community in those regions are far stronger and you will learn to exist in a smaller tribe than part of the conquering army. You can be the big fish in the small pond if you are decentralized.
Grow your own food because you have land to do it on. Don’t rely on banks because you can afford to pay cash for your own property. Use that saved money not to give to a centralized authority that will give you back a trickle each month by way of interest payment at a level that they decide. If the cartel of private bankers (the US Federal Reserve) prefer to support the debt enslaved rather than the savers, you don’t care. You become your own bank, don’t have any debt, and live in a place that has less government costs by way of property taxes, sales taxes, etc.
Your community is local to you. Your freedom to practice in your religion or belief system is never controlled by a larger authority than you. Your ability to live how you want to live, with whom you want to live, is yours. Your ability to create anything you want is celebrated rather than controlled. Your ability to defend your property & rights is freely available to you.
These are the foundations that made America. And yet we are selling that out to centralized authority that will put their own dysfunctional security ahead of yours. If you don’t believe in invading another sovereign country, bad luck. The centralized power designated that country as “evil” and consequently they will be invaded. The reason behind that designation is never honestly explained or is lied to the public, and yet we have no better response to that than to suck it up and ”respect the troops”.
And then there are the challenges of the human experience that no centralized authority has any answer for. Whether than be mental or physical health. They leave that up to you to sort out on your own. There is little in the way of support at a psychological level for what people need, preferring to defer to churches or seek solace in your friends at the bar. When it comes to physical health care, centralized authority only want to see this from a monetary perspective. You have been hypnotized to think that health care is health insurance, but it is far from that. You are responsible for you, and when you can’t be it would be better to have a local physician that you know who is close than to go to come centralized government controlled organization that will ration care out based on some budgetary needs. Sure, if you have no choice and need an emergency room - well any port in a storm, I say. But when it comes to more preventative care, you should seek out decentralized and local vendors.
I could go on with dozens more examples of how centralized authority is more of an enemy than on your side. But I’d be preaching to the choir on this because I suspect you already know that. However all I’m attempting to shine a light on here is that you control your choices - your decisions and those that question the norm and make unusual decisions that favor their own sovereignty, whether that be to invest in physical gold and store it in your own safe, or buy crypto-currency on the hope that society will eventually come around to seeing this as a future that supports them rather than the banksters out there. Or where you get your media or where you get your entertainment. That supporting people in our community directly is better than being lazy and giving up to centralized control. That growing your own food and knowing where it comes from is better than blind faith that a centralized food broker has your health as their best interest. That your doctor is offering an honest solution and isn’t being driven by Big Pharma to push their drug of the week to you because they get some form of kickback - whether monetary or favor. And that your president isn’t lying his ass off to you at every level in order to garner your support before he or she is caught out and unable to materialize on the promises, yet wants to take credit for every positive thing that goes on because we humans are damn good at what we can do individually.
The truth is that centralized organizations cannot support the needs of us as individuals or small collectives. We are the annoying outliers that don’t fit into their computer software or their systems. We don’t tick the right boxes and we cost them more to manage than those that do. They would be best to be rid of us in whatever form they determine suits their cause. If we stand in the way of their objectives, then they will use force. If we are just annoying, they will likely push us to the side and let the rest of society ostracize us so they don’t have to do it. Eventually social peer group pressure will bring you back to the fold and you will fit into their little boxes again.
For me, there is no decision here. Yes, it is harder to be a contrarian and not fit in the box of the centralized power. It is harder work to swim upstream. It is harder to toil over the things that matter, like growing food, personal sovereignty, defense, etc. It is anti-social to not have a job and not have workmates to socialize with. It is hard to be constantly criticized and laughed at, as you watch the rest of society go through their five stages of grief. Their denial (first stage) becomes you being a target of their comedy, and yet when they realize you were right, they don’t start apologizing. They get angry, then they come for more information, eventually feeling like you are depressing them, but one day they finally accept your wisdom and then community happens.
I don’t want to try and make this some epic mission that I have, because I’m just trying to open people’s eyes and let them make their own journey of discovery. But I do know how the five stages of grief work, and I’ve seen this play out in many ways. I do know that 99% of society in the western world would prefer to just succumb to the central authority and go back to watching the football than to openly question that authority and devise a strategy to retain their own independence and sovereignty. I also know that direct confrontation with central authority doesn’t work. You have to learn and observe how that authority works and get out of the way of it rather than try to confront it. Like the waves of the ocean, the surfer can’t fight against them. They have to observe and learn how they work, and then use them to their own advantage.
So I leave you with the explanation of decentralization and how you can use this as a philosophy to regain your control of your life, your money and your freedom. It is a battle worth fighting, although it can be costly and time consuming. But you are not alone on this path. My way is just one way to do it. It may not be the only way. But it worked for me, and continues to work to this day. I hope you can take from it some information that might help you on your own journey.
Until next time.
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