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00:00In your own funding for your project, you did take some really granted funds from FTSE Future Fund, it's widely known that they've given money to an awful lot of organizations. You're an experimental research organization. Just tell us a little bit why the Future Fund would have had interest in getting to grips with democratic effective governance that you study. Yeah, I think there's actually a lot of overlaps between that question and the one about centralization and decentralization, because a lot of the supposed promise of crypto on a decentralized side was to say there is something about democratic effective governance and self-determination that is enabled by these technologies. Right. That we are able to do more decentralized, less intervention oriented institutional structures. And we were experimenting with democracy and technology and so got similar granted funds from RTX. That process. But I think it speaks to also this question around whether centralization is good or bad, because in my point of view, accountability is really a big part of the goal of both decentralization and centralization. And the ecosystem is often much more focused on that kind or the degree of decentralization as opposed to the type of decentralization. So you ran this quote of Tim Draper, for example, who is saying now RTX is too centralized. But comparing that to banks, which haven't failed in quite a while, are very centralized entities in some sense and are regulated as such. Right. And so I think it's quite complicated to call something as a whole purely centralized and say all of its faults are down to that division. We've had this debate over centralized, decentralized. You've introduced us to a third term poly centralism or poly centrism. What is that? Yeah, it's a bit of an academic term, but I find myself often saying we don't want either decentralization or centralization. What we want is policy centrism and the term is a bit what it sounds like. So having many centers and I think the problem is, you know, decentralized systems often carry a grain of centralization within them. A great example of this is the Internet. And so the TPP protocol that underpins a lot of the communication capabilities and packet switching of the Internet is decentralized and it successfully been decentralized. Right. But the way that that happened is actually through this complex, polycentric, having many systems sorry, many centers of standard setting organizations and regulatory agencies and private companies that kind of sprung up around it that allowed for that decentralization to stay in place. However, you know, the Internet as we know it now is not decentralized. Most of us spend our time on the Internet on five Web sites. And why did that happen? Because many of the layers of the stack under over that decentralized protocol, centralized because there was no kind of clear poly centric structure keeping them decentralized. And, you know, decentralization tends to centralize without some checks and balances. So I think that's where this idea of poly centrism comes from, instead of just allowing chaotic centralization from chaotic decentralization. Can you intentionally allow checks and balances? And by the way, this is basically the principle that underpins federalism and the U.S. government and all of these kinds of things that say there should be something between the local and the federal right to that end. Divya, therefore, is it regulation that helps with the transparency, the checks and balances within inevitably centralized parts? How do you get to the utopia of poly centrism? Does it become organic? Or do you need actually real fundamental rules in place to drive the. I think it's a great question. I mean, I think regulation is one thing and regulating harms is always important. But many of successful polycentric systems, whether we think about it as federal agency Wikipedia has a polycentric system and many open source code repositories on this way. And the word actually comes from Elinor Ostrom, who is a Nobel Prize winner, and she looks at self-governing systems, not regulation at all, not state run systems at all. And so I think a lot of this is not just rules, but can you have different kinds of institutions? Can you have public input and private input and civil society input? And that's how the standard setting process of the Internet currently runs. And so policy centrism won't work if it's just rules top down. It's this ecosystem of different centers that's necessary. And I do think, you know, the crypto industry where it goes next is unclear. But to succeed, it will need to develop this kind of polycentric ability to not just invite in certain forms of regulation, but actually have different groups at the table, because otherwise a lot of these, you know, tend towards either centralization or plutocracy.

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FTX and the Centralization Debate

Collective Intelligence Project Co-Founder Divya Siddarth joins Caroline Hyde and Ed Ludlow to talk about why she thinks crypto has been focused on the wrong kind of decentralization, and which lessons the crypto space should take from the FTX crash. (Source: Bloomberg)

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