Some claim that decentralized system that have to be governed aren't really decentralized. This article explains why that thinking is misguided.


Last week, I referenced an article in American Banker on the responsibilities of blockchain developers. I focused mainly on the governance angle, but the article makes several pokes at the "decentralization charade" and that's been bothering me. The basic point being that (a) there's no such thing as a blockchain without governance (whether ad hoc or deliberate) and (b) governance means that the ledger isn't truly decentralized.

In Re-imagining Decentralized and Distributed, I make the distinction between distributed and decentralized by stating that decentralized systems are composed of pieces that are not under the control of any single entity. By that definition, DNS, for example, is a pretty good example of a decentralized service since it's composed of servers run by millions of separate organizations around the world, cooperating to map names to IP numbers. There are others including email, the Web, and the Internet itself.

But DNS is clearly subject to some level of governance. The protocol is determined by a standards body. Most of the DNS servers in the world are running an open-source DNS server called BIND that is managed by the Internet System Consortium. Domain names themselves are governed by rules put in place by ICANN. There are a group of people who control, for better or worse, what DNS is and how it works.

So, is DNS decentralized? I maintain that DNS is decentralized, despite a relatively small set of people who, together, govern it. Here's why:

First, we have to recognize that decentralization is a continuum, not a binary proposition. Could we imagine a system for mapping names into IP numbers that is more decentralized? Probably. Could we imagine one less decentralized? Most certainly. And given how DNS is governed, there are a multitude of entities who have to agree to make significant changes to the overall operation of the DNS system.

Second, and more important, the governance of the DNS system is open. Structurally, it's difficult for those who govern DNS to make any large-scale change without everyone knowing about them and, if they choose, objecting.

Third, the kinds of decisions that can be made by the governance bodies are limited, in practice, but the structure of the system, the standards, and the traditions of practice that have grown up around it. For example, there is a well-defined process for handling domain name disputes. Not everyone will be happy with it, but at least it exists and is understood. Dispute resolution, as one example, is not ad hoc, arbitrary, or secret.

Lastly, the DNS system may be governed by a relatively small set of people and organizations, but it's run by literally millions. People running DNS servers have a choice about what server software they run. If enough of them decided to freeze at a particular place because they objected to changes or to fork the code, they could effectively derail an unpopular decision.

Distributed ledgers will have varying levels of decentralization depending on their purpose and their governance model and how that model is made operational. The standard by which they should be judged is not "does any human ever make a decision affecting the ledger" but rather:

  1. Is the ledger as decentralized as we can make it while achieving the ends for which the ledger was created?
  2. Is the governance process open? Who can participate? How are the governing entities chosen?
  3. How light is the governance? Are the kinds of decisions the governing bodies can make limited by declared process?
  4. Is the operation of the system dependent of the voluntary participation of entities outside the governing bodies?

Distributed ledgers are young and the methods and modes of governance, along with those entities participating in their governance, are in flux. There are many decisions yet to be made. What's more, there's not one distributed ledger, but many. We're still experimenting with what will work and what won't.

While a perfectly decentralized system may be beyond our reach and even undesirable for many reasons, we can certainly do better than the centralized systems that have grown up on the Web to date. Might we come up with even more decentralized systems in the future? Yes. But that shouldn't stop us from creating the most decentralized systems we can now. And for now, we've seen that governance is necessary. Let's keep it light and open and move forward.