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False Sense of Decentralization May Distort Public View of Cryptocurrencies

  • Darryn Pollock
    SingUlarity

    84 percent of cryptocurrencies are not really decentralized: report


False Sense of Decentralization May Distort Public View of Cryptocurrencies
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Contents

One of the main pillars of cryptocurrencies and their Blockchain technology is the decentralized nature of the tokens. Bitcoin has been heralded as a financial system that has no central leadership and thus is fully decentralized.

However, this effort to be decentralized is not a black and white issue, more of a sliding scale which allows many cryptocurrencies to claim decentralization while being predominantly centralized and controlled.

A recent report has pointed out that as little as 16 percent of all cryptocurrencies are truly decentralized in the manner in which Satoshi Nakamoto intended when he created Bitcoin. There are other questionable examples, such as XRP under Ripple Labs, but there is also a host of cryptocurrencies that are falsifying their decentralized nature.


The issue is, much like the exchanges that dominate the cryptocurrency space, there is this false belief in decentralization while behind the scenes, developers and other leaders are controlling the way in which these Blockchains operate. As an emerging ecosystem that is supported by the notion of decentralization, this is problematic as it is being built on a lie.

Surprising facts

Cryptocurrency research firm CryptoCompare released its annual Cryptoasset Taxonomy Report and revealed that 84 percent of cryptocurrencies across the market are not really decentralized. Some were either fully centralized or only semi-decentralized.

It is a sign of the times that there is the case in the cryptocurrency market as things have changed a lot since Bitcoin was created as a defiance against the centralized banking system in the wake of the 2008 financial crisis.

Now, the trend is largely driven by the rapid growth of new utility tokens running on private servers. Only nine percent of all utility tokens were found to be sufficiently decentralized. Cryptocurrencies that function primarily as a means of payment, such as Bitcoin, Litecoin, Stellar, and others, are among the most decentralized types of crypto assets.

But, there are also those that are well known to not be decentralized, such as XRP — and now also EOS which has shown that only 100 addresses contain 69 percent of the network’s native tokens.

The problems with not being decentralized

Bitcoin and the rest of the emerging cryptocurrency market are still incredibly new, yet its rally to $20,000 made it also very interesting, propelling it into the mainstream. This has led to a boom in new cryptocurrencies and Blockchains being built, but it has also led to a desire to control.

Ripple Labs is one such company that has not shied away from the centralized control of its tokens, wanting to be the master of the XRP and where it can and cannot be used. However, other companies have used the decentralization as a selling-point, while maintaining control over the asset.

Really, the world has moved on enough where the direct need for decentralized tokens is not as pressing and in many respects has been met by the 16 percent which are considered fully decentralized.

Additionally, those that are considered fully decentralized are either well-regarded or have been around long enough to be considered stable and safe.

But those coins that are entering the market with little more than a dream and a white paper, spouting off about decentralization when it is clearly not present, are causing a fictitious trap.

Honesty and integrity

The principle behind decentralization is obviously important and big in the cryptocurrency space, but it does not necessarily need to be the only option. There is no problem with companies bringing out centralized tokens if they believe they can run it correctly, but there really needs to be more honesty.

The cryptocurrency space is still rife with scams and unknowns, as well as hidden agendas and get-rich-quick-schemes, thus to lie about decentralization is again damaging the perception of this emerging space as much as major hacks on exchanges are.

Cover image via u.today
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Artificial Intelligence: Usurped and Trapped, But Not For Much Longer

  • Darryn Pollock
    SingUlarity

    Artificial Intelligence has so much range and scope, and although it has primarily been aimed at making advertising revenue, it could be different in the East


Artificial Intelligence: Usurped and Trapped, But Not For Much Longer
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Contents

Why AI’s true potential can be fully explored in the East, not in the West

The Internet was born out of the idea of sharing information across the planet with no constraints or controls. Yet the manner in which it has manifested itself today is no longer true to those original ideas.

In the age of social media, we have come to a point where information and data have been usurped by a few companies that allow people to use their services with an underlying, hidden cost of that data.


Facebook and Google have taken full control of data, using it for their own needs. This is starting to expand into not only people’s data but also new and emerging technologies, such as AI.

Much like how other companies in Silicon Valley began their lives with this brazen entrepreneurial spirit and slowly evolved into ones that could not survive on innovation alone, this has led them down the road of chasing ad revenue, creating new and deceivious ways in which to reach it.

The same applies to AI; such a new and potentially revolutionary technology is being sprouted by small innovative companies, only to be bought out and taken over by the Internet giants of Google and Facebook to be used as a new avenue for ad dollars.

These days, the direction of AI companies is overwhelmingly being used to target user behavior in order to extract more ad dollars, rather than advancing the technology for its much more powerful and useful needs.

It has left AI languishing in one direction when enough resources are thrown at it, and thus pigeonholed its potential — but that is only real for the West. There is a big drive coming from China, which has not taken long to catch up in terms of research to expand AI.

However, their mandate is very different to the West’s, and ad dollars are not part of the process for AI. This means its true potential can be exponentially explored in the East, and, in time, probably overtake the stymied position of western AI.

Of course, China may forge ahead, but with its governmental control and socialistic nature, it still brings its own problems when it comes to advancing a new and only possible technology like AI. For this reason, it is also worth delving into the potential of CI (Community Intelligence)

The embodiment of evil

It would be a bit harsh and dramatic to call the likes of Facebook and Google ‘evil’; however, Jaron Lanier, who is widely credited as a founder of virtual reality, has recently delivered a sobering prognosis on the spiraling corruption of these types of social networks.

“I can’t call them social networks anymore. I call them behavior modification empires,” said Lanier in Vancouver for the TED conference, adding:

“I don’t think it’s a matter of bad people who’ve done a bad thing. It’s a globally tragic, astounding ridiculous system rather than a wave of evil.”

Lanier’s point is that the Internet was built on a socialist model that everything should be free and accessible to all. But it also celebrated visionary tech entrepreneurs who made it big with their world-changing ideas: “How do you celebrate entrepreneurship when everything is free?” he mused.

This is where the crossover between these two juxtapositioned ideas was reached in the form of advertising funding. Advertising allows companies to use their innovative ideas to attract people and make money off them, and that model has been growing exponentially with a few major companies usurping all the power.

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Now, the close working relationship of these major companies and the wants and needs of advertisers see them using their innovation to maximize advertising revenue. Thus, the tech entrepreneurs and visionaries who are pushing the boundaries are often bought out and taken over by the companies which have already made their fortune.

This then leads to these ideas taking a road which is far more applicable to achieving ad revenue than expanding the boundaries of tech innovation.

AI’s dalliance with advertising

AI is one such revolutionary tech advancement which has become trapped and usurped by the likes of Google, Facebook, and other tech giants who are trying to utilize this new technology as another way to create ad revenue.

It has become so that these large tech companies are picking up AI thought leaders and developers, either out of university or worse, by buying out their small startups and steering them in the direction they need.

“In effect, tech startups are serving as stealth recruiting tools for big companies, used to gobble up young developers and researchers who don’t particularly feel like big-company careers. These young nerds sign up to work for some exciting startup, but then the startup inevitably gets sold to a big company, and they wind up cashing out to a small degree,” explains Ben Goertzel, founder and CEO of Singularity NET, a Blockchain-based AI marketplace.

“The channeling of AI expertise into big corporations has a significant impact regarding what kinds of problems AI gets primarily applied to. Advertising, for example, gets an awful lot of attention. Cambridge Analytica’s relatively crude methods of social media engineering, applied to political campaigning, got a lot of press in the last US presidential election cycle. But Google, Facebook and Baidu (among others) have vastly more sophisticated manipulation machinery, which is used not to elect candidates but rather to direct people to buy products and services,” he adds.

A new dawn rises in the East

The way things work in the West, or in the US in particular, has made it standard practice for new technology to be primarily advertising-focused. This has also only come about because of the general monopoly and power that Western companies have over the vast majority of the Internet.

No longer is the Internet totally free and socialist. Even in countries where there is socialism, that notion is an incorrect one. The Socialist Republic of China has cut itself off from the rest of the Internet with its Great Firewall, but behind that wall, it is also devoid of reliance on advertising dollars.

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Because of this, China is building up its AI development at a rapid rate, but it is also not redirecting it to be used solely as a tool for advertising revenue. China’s growth of AI has larger and far-reaching potential as they are looking to expand the technology to its full potential.

So, while there may be a division in the advancement of Westernised AI and that of the East, there is at least a base of development which is looking to drive AI forward to its full potential, offering a level of equilibrium.

Issues with China and AI alternative in CI

Although China does not have the same reliance on advertising dollars to drive its AI advancement, the strictly-controlled country is not free to explore and expand AI as it pleases. Government intervention and direction is clear and evident in advancing technologies. Thus, AI will still have some sort of agenda dictated to it by the state.

It is for this reason that Community Intelligence is a viable alternative to AI and its stymied growth.

The world is heading towards an era of true community involvement and strength. No longer is there a one-way interaction of information that was originally seen at the birth of the Internet. Furthermore, as discussed with the dangers of social media, there is now this third wave of community-powered engagement.

Thus, to have CI as an alternative is to have a group collective answer questions and process problems in order to determine the path of common acceptance.

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