Miles Jennings, General Counselor of A16Z, argued that traditional legal approaches, such as antitrust measures, often do not tackle the real problems of centralization.
According to a blog post from Jennings, centralized control in technology, finance and artificial intelligence has considerable consequences – determining the public discourse, financial access and the flow of information.
Big Tech, Big Banks and Big Ai dominate these sectors, so that users say little about the platforms that form their lives. Although decentralization offers a solution, it requires strong incentives to become viable.
Centralization is efficient, so that companies and governments can coordinate resources, make rapid decisions and be effectively scaled.
However, Jennings argues that this concentration of power suppresses competition, limits financial access and limits users to random rules. Historically, decentralization was difficult to implement because the technology was missing to work on a scale.
But blockchain networks such as Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) have shown that decentralized ecosystems can function efficiently, with trillions of dollars in value that flows through.
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Stimulating decentralization
The challenge now, Jennings notes, is stimulating decentralization. Blockchain-based projects often struggle to balance legal uncertainty with the need for distributed administration. Many opt for centralization under the guise of decentralization, creating risks for users.
Regulatory frameworks must evolve, reducing the compliance tax if projects decentralize. Instead of applying traditional financing laws to decentralized financing, policy should be tailor -made, the differences between intermediary guided and confidential systems should recognize.
Jennings emphasizes that decentralization promotes competition, creativity and freedom and at the same time distributes the value more reasonably. The key, he argues, is creating legal and economic stimuli that encourage companies and networks to embrace decentralization in a sustainable way.
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