Decentralization Is Not Broken

Today was the blackest friday of all.

And I’ll tell you why…

Dark and clouded sky

I’ve been paying attention to the cryptocurrency markets for the past years. I’ve been studying them and trying to figure out all the inner workings of different altcoins but it wasn’t until Ethereum showed up that I felt the urge to participate.

It was the first currency (if we can even name it that way) that had a radically different value proposition and I as an individual believed in its vision and all the good things it would bring the world through **decentralized **computation.

So I started my path of investing in cryptocurrencies always keeping my Ether as the piggy bank of all my day trading.

  • I built a mining rig and joined the Ethereum network.

  • I bought Ether through several exchanges.

  • I bought altcoins that aligned with Ethereum’s vision in one way or the other.

And then comes theDAO:

The DAO is a digital decentralized autonomous organization and a form of investor-directed venture capital fund. The DAO has an objective to provide a new decentralized business model for organizing both commercial and non-profit enterprises. It has been instantiated on the Ethereum blockchain, and has no conventional management structure or board of directors. The code of the DAO is open-source.

theDAO’s landing page

theDAO’s landing page

It had a crowdfunding phase which turned out to be the biggest crowdfunding to this date amassing a whopping $160 million.

It was decentralization at its best, in service of humanity 2.0

Sadly theDAO’s contract had an exploitable feature and roughly at 4AM UTC today all of its funds started being dumped into a single hacker’s wallet.

It was its end. Before it turned a month old.

I woke up to this catastrophic scenario, losing most of my investment as theDAO dragged Ether’s price through the gutter with its failure.

And although I panicked, as did the whole community, I quickly started seeing it as the social experience it was meant to be. It didn’t work. We were not prepared.

Vitalik Buterin

Vitalik Buterin

Vitalik Buterin (one of Ethereum’s creators) urged to find a solution as this was the most publicly covered project that Ethereum had to offer until now. It’s first real baby.

So he came up with the idea of a fork to the blockchain.

What this means is that the blockchain would be rolled back to undo these wrongly made transactions and theDAO would be dismantled giving back all lost Ether to those who invested.

Now the community gets divided: those supporting the fork and those opposing it.

More important than which side I am on is the point I’m trying to make writing this.

Those opposing the fork say that it would hurt the supposed immutability of Ethereum’s blockchain and ultimately faith in all cryptocurrencies but this is just not true.

Decentralization is not immutability.

It was the new democracy at its best. It still is. Just needs some tweaking.

And this fork is the same thing. It is not Vitalik trying to control people but guiding them instead. Ultimately people make the choice whether to do it or not. This will be the masses choosing their own faith.

That’s what crypto is and why it is the only possible future.

Today was the blackest friday of all. But decentralization is certainly not broken, it just got a little smarter.