tl;dr: What does a decentralized network actually mean? It’s an arena in which we’re all contributors.

I tend to throw around the term “decentralized network” as if it’s abundantly clear what it means to everyone who hears it.

It’s not and I realize that, but despite my familiarity with the concept as well as the hands-on experience in participating in them, I’ve struggled to succinctly explain it to others.

So, when I was reading Mario Laul’s piece, Ten Theses On Decentralized Network Governance, I really appreciated #2.

Decentralized networks are fields — social arenas of symbolic and material production in which interested actors compete and cooperate over network-specific resources as they provision and consume the products and services available in the network.

Frankly, I think the opening was much stronger than the closing, but a second reading should help clarify it.

Laul continues:

An important precondition for constructing a field — a game worth playing — is socially distributed information about resources at stake, and at least some shared understanding of why these resources are valuable.

This is a really important point and as I was imbibing the concept, I was lying on my couch in our den. Across from me, on the floor were a bunch of board games that my kids had stacked up in front of the fireplace (which we never use).

One of them was “Pandemic“, which has become particularly popular these days in my house…and in others (I can’t imagine why).

Games Have Rules and Participants

Pandemic, like Monopoly, Trivial Pursuit, and other board games have a bunch of rules. There are resources. There are constraints and opportunities for competition and cooperation.

If there’s consensus, players can modify the rules, (i.e. getting the money from Free Parking in Monopoly),

You can opt in and you can opt out of games. Most games are finite, that’s the point. But some, especially many online video games are “infinite” games like “League of Legends.”

Decentralized networks are the same, but different.

They are games where the participants all understand the rules, can collaborate and modify rules if they see fit.

What makes these networks unique, however, is that (at least some of) the rules are baked into the software so that, for example, the banker can’t steal money from the bank in Monopoly or surreptitiously move pieces around the board while another player has taken a bathroom break.

The fact that there’s software, which is maintained by multiple computers (decentralized) vs. one computer (centralized) reduces significantly the risk of cheating and bad actors.

That’s one advantage of playing in these games.

Collaborative Evolution

Another advantage is that, because the rules for modifying the game are also known and clear, the game/arena/network can evolve in accordance with the wishes of the majority.

Keep in mind, however, that “majority” can be based on “one person, one vote,” it could be based on “total ownership” or it could be on “reputation accrued” or many other possibilities. It doesn’t matter, since that definition (part of the ‘governance’) is (partially) defined upfront.

And if the majority makes a rule that the minority doesn’t like?

Well, then they cash in their chips and leave that arena for a different arena, a move which has adverse impact on those remaining, since it creates downward pressure on the price.

Contributors Make the Rules

What’s different about the arena/game of decentralized networks is that, unlike the board game Pandemic, the rules get to adapt to the changing realities of life outside the game.

As Andre Cronje (the creator of the DeFi unicorn YFI) wrote in Unpacking my involvement in DeFi:

Tokens are not stocks.

People treat them like stocks, in defi, tokens are a coordination mechanism.

If you have tokens, it is because you want to be a contributor, not a bystander. There is this concept of “community”, and I think that concept is causing friction, it should not be team and community, but instead contributors. There is no separation, they are one and the same.

I totally agree, particularly because I wrote a post back in May 2019 called "A Tale of Two DAOs and the Rise of Contributor Experience" with the tl:dr as follows:

The overall experience for developers and non-developers of engaging with a DAO could be a critical determinant of the success or failure of a crypto network.  Introducing the new discipline of Contributor Experience (CX).

I’ll wrap up with this.

Decentralized networks are arenas in which participants are active contributors who modify the rules in accordance with the realities of the world around them so they can continue to play a cooperative and mutually beneficial game.

With decentralized networks, we all have the chance to be the “[Person] in the Arena”