A16Z general lawyer Miles Jennings argued that traditional regulatory approaches, such as antitrust measures, often fail to address real issues of centralization.
As blog post By Gennings, centralized control in technology, finance and artificial intelligence creates significant results – reducing public discourse, financial access and information flow.
Big Tech, Big Bank and Big Ei dominate these areas, users call very little on platforms that shape their lives. While decentralization provides a solution, it requires strong incentives to become viable.
Centralization is efficient, allowing companies and governments to coordinate resources, make quick decisions and scale effectively.
However, Jennings argues that this concentration of power stifles competes, restricting financial access, and gives users the subject for arbitrary rules. Historically, it has become difficult to apply decentralization as it lacked technology to operate on a scale.
But blockchain networks such as bitcoin (BTC), atherium (ath), and solan (Sol) have displayed that decentralized ecosystems can function efficiently, with trillions of dollars in the flowing value through them.
Encourage decentralization
Now the challenge is encouraging Gennings notes, decentralization. Blockchain-based projects often struggle to balance regulatory uncertainty with the need for distributed governance. Many opt for centralization under the guise of decentralization, which pose a risk for users.
The regulatory structure needs to be developed, the projects are decentralized as reducing compliance burden. Instead of implementing traditional finance laws for decentralized finance, analog policies should identify the differences between mediation-tender and reliable systems.
Gennings emphasize that decentralization promoted competition, creativity and freedom when distributing more fairly. The key, he argues, is creating legal and economic incentives that encourage businesses and networks to embrace decentralization in a permanent way.
