Decentralization and democracy: Three centuries of debate

On this day, September 17th, 1787, delegates from all over the former British colonies in North America gathered at Independence Hall in Philadelphia, Pennsylvania, to overthrow and replace the United States government.

The one they replaced—the Articles of Confederation—had failed so thoroughly as to be a non-entity by the time the delegates gathered at Philadelphia. The one they replaced it with— the United States Constitution—was the result of an intense summer of complex debate surrounding one question: how can we build a functional, authoritative government that does not eventually trend toward autocracy?

The brief but powerful legal document that resulted is still the most successful decentralized system that has ever been designed; one that, on aggregate but not without error, has trended toward greater liberties and enfranchisement for its constituents over time, not less.

It is a profound and tragic irony, then, to see the United States so unapologetically positioned at the top of the world in the 21st Century, a vast superpower whose interests and institutions hold sway over all of global society. For many, the first nation ever to free itself successfully from internal tyranny has itself become the very kind of tyrant it swore off in 1776.

Now, not quite 250 years later, a global urge for decentralization is pushing back against the United States itself.

The Ideology of Decentralization

The 2008 financial crisis, in which a grossly overleveraged global financial system collapsed under the weight of its own short-sighted avarice, unveiled the fragility and interconnectedness of the world’s centralized financial systems, at the center of which sat the United States, Wall Street, and the Federal Reserve System. It was in this era that we learned that some actors were “too big to fail,” but the common question quickly became how they were ever allowed to get so big in the first place.

Following the crisis, centralized financial systems and the governments that enabled or controlled them became the target of heated criticism. Public confidence in these institutions seriously faltered as calls for transparency, accountability, and easier access to financial services surged.

It was in this climate that the blockchain and cryptocurrency movements began to gain traction, beginning almost immediately with the Bitcoin Whitepaper and the network’s genesis block in January 2009 and exploding into the kaleidoscope of projects, chains, concepts,…