Centralization of control and self-organization of entropy

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This post originally appeared on ZeMing M. Gao’s website, and we republished with permission from the author. Read the full piece here.

When a system presents itself as a decentralized self-organization but is actually centrally controlled, can you tell?

Think about all this in the context of artificial intelligence (AI) and that of cryptocurrencies.

‘Centralization of control’ and ‘self-organization of entropy’ are fundamentally different.

Centralization of control, or usually just ‘centralization,’ represents centralized control by a decision-making authority or through resources in a central entity. In a centralized system or organization, power and decision-making typically reside with a central authority or a hierarchical structure. Centralization can streamline coordination, enforcement, and resource allocation but may result in attack/fail points, bottlenecks, slower decision-making in the action field, and reduced adaptability to the environment.

In human systems, centralization tends to result in corruption.

Self-organization of entropy is an emergent property of complex systems that can exhibit emergent patterns, organization, or structures without external control or direction. It implies that order can arise from disorder through local interactions and feedback mechanisms within the system. It counters entropy, which refers to the inherent tendency of a system to move toward disorder or randomness.

Entropy is a concept from thermodynamics that refers to the degree of disorder or randomness in a system. Self-organization, on the other hand, is a process in which order or structure emerges spontaneously or autonomously from interactions among the components or elements of a system, without centralized control or external influence. Self-organization can be observed in various natural and artificial systems, such as biological systems, social networks, or even certain algorithms and computational models.

In brief, centralization refers to the concentration of control and decision-making, while self-organization of entropy is the emergence of order or structure in a system through local interactions and feedback mechanisms without centralized control. These concepts are distinct and relate to different aspects of systems and organizations.

In the context of crypto

The problem with crypto is not only that people don’t understand the fundamental difference between “centralization of control” and “self-organization of entropy” but also that hidden/covert human centralization masquerades as “self-organization of entropy.”

One needs not to look beyond the top cryptos, including BTC and Ethereum, to see that, not to even mention the exchanges.

This is not an indictment against the “self-organization of entropy” but an appeal for the genuine form of it and also the right kind of environment that fosters it.

Another related matter: Not every self-organization of entropy is healthy. While life is the most meaningful self-organization of entropy, cancer is powerful self-organization of entropy too.

Crypto does not need new laws and regulations. Anything that is targeting crypto as if it were something mysteriously unique de novo creation is likely to cause unintended negative consequences, especially considering how little understanding of the science and technology there is among the lawmakers.

But the commonsensical laws and regulations of securities and fraud need to be enforced. The law enforcement agencies such as the Securities and Exchange Commission (SEC) should not be fooled by the emperor’s cloth (which does not exist).

This is because of at least two reasons:

(1) the market of selling securities in the last 300 years has clearly proven itself to be unable to generate healthy self-organization of entropy, but rather capable of creating extremely powerful and selfish and destructive cancerous self-organization of entropy (again, not every self-organization of entropy is healthy); and

(2) lacking enforcement against such behavior has proven to be the biggest obstacle to real innovation. It is hard for healthy cells to grow and function well when oxygen and nutrition are sucked up by cancer.

See more in this article: The cancerous crypto.

Crypto and DLT/Blockchain/Web3

However, the above is about the current crypto industry, not DLT/Blockchain/Web3. The former is a false representation of the latter. The current crypto industry is more economically corrupt than any other industry in human history. Its ugliness is only matched by the beauty of DLT/blockchain/web3, which has unfortunately been usurped as a façade to mask the crypto corruption.

There is hope, to which I’m willing to contribute my meager portion.

The true Web3 is the solution to the current decentralized data model problem, including not only the old centralized ad-based search engines but also the new large language models (LLM) such as ChatGPT. See The usefulness and deceptiveness of AI.

The solution is truly decentralized data ownership, implemented by a competent technology to ensure universal frictionless data access despite the decentralized ownership. Universal means not only across all localities but also across all applications.

Not the hyped sham web3, but the genuine web3, is where the solution lies.

The problem is that, without a universal public blockchain integrated with IPv6 at TCP/IP, I don’t see how data ownership can be truly universally decentralized. In this, I believe the vast majority of people who are active in the field of blockchain have misplaced their faith in the multi-blockchain solution.

There must be a one-chain unification. The ‘unification’ is technological unification, which is different from power centralization. For example, the Internet is unified on TCP/IP, but the Internet itself is decentralized.

For a reason analogous to Internet’s TCP/IP unification, I envision a future Internet that integrates IPv6 and blockchain at the base TCP/IP level to achieve technological unification, but the unifying blockchain itself is decentralized to avoid power centralization. See more about this in these articles: Technological unification and power decentralization; and Pluralism and unification.

Watch: Decentralization is pushing data to the edges