The often quoted observation of a 19th century British politician, that “Power tends to corrupt, and absolute power corrupts absolutely” needs updating for the Internet age. Today, it is surely more meaningful to say: “Centralised power corrupts; decentralised power liberates.”

The exercise of centralized power was originally made necessary because of the need for effective administration of the increasingly populous and complex societies that gradually developed following the introduction of agriculture some 12,000 years ago.

Centralized power is the ability vested in the few to direct the behaviour of the many. Such ability being secured either directly through force of arms, belief in divine ordination, time-honoured tradition electoral success or indirectly through being delegated.

Unfortunately, human nature being what it is, anyone vested with centralized power (by whatever means) is liable to be corrupted by it, no matter how many checks and balances and other forms or accountability they are subject to.

Information is of course the key to accountability which is why the control of information, including its suppression, has always gone hand in hand with the exercise of centralized power. However, since the Middle Ages the control of information has become progressively more difficult to enforce; in particular following the invention of the printing press, the gradual spread of mass literacy, the rise of the middle classes and the (re)discovery of scientific methods of learning and inquiry (based on humanism and empirical evidence) made possible by the Renaissance which, in turn, helped to create the conditions for the Industrial Revolution.

Today it is difficult to know exactly who or what the ultimate holders of centralized power are. Arguably, given the increasing hollowing out of representative democracy, it’s the unelected and unaccountable international and global institutions which most people either don’t even know exist or, if they do, have no idea what their function is; for example, to name but a few, the ‘four pillars’ of global economic governance (the International Monetary Fund, the World Bank, the World Trade Organization, the Financial Stability Board of the G20) the Bank for International Settlement and the European Commission.

What is certain though is that centralized power is underpinned by the debt-based monetary systems used throughout the world and run, in effect, by private, commercial banks which, by virtue of their virtual monopoly over domestic credit creation, create most of the money circulating in the world’s economies – as much as 97% – and determine its allocation, disproportionately for consumptive and speculative (as opposed to productive) purposes, thereby expanding the debt-driven FIRE economy, at the expense of the real (productive) part of the economy, and further enriching a wealthy elite.

Information continues of course to be a hugely valuable resource and although in the popular imagination the Internet is seen as having finally liberated the use of that resource from the control of centralized power and its gatekeepers the reality is more complicated, as shown in particular by the Snowden revelations about mass surveillance and the inconvenient fact that: “…the global machinery of the internet is operated by a conglomerate dominated by governments – and especially the US government.” (Matthew Sparkes, Daily Telegraph).

Nevertheless, despite the continuing best efforts of the holders of centralized power and their gatekeepers to maintain their monopoly control, cracks in the gate are, thanks to information technology, beginning to appear and with it the hope that real freedom may yet one day spread around the world.

Digitization has given rise to countless innovations. However, so far there are only three really worth mentioning, all of them radical and disruptive and each of which has set in motion a ripple effect that will shape the world for many decades to come. What these technologies have in common is their way of automizing operations. They are robust and decentralized systems with no single point of failure. No one is in charge of them nor can they be shut down. They are global and borderless systems that bring people and businesses closer together.

The Internet was the first one. It is a global public space potentially free of any form of centralized control. Meanwhile, for the first time ever, people can be in direct communication with each other without a central hub. Even if you take down some of the servers, the information will route through different ones, ultimately reaching its destination. This allows the free flow of ideas, information and data. The next breakthrough was the digitization of cryptography, which guarantees secure communication between people.

The other, more recent, invention is the blockchain. Just as the Internet is doing, it will help to increase the wealth and liberty of millions, eventually billions, of people around the world. While the Internet is about sending information, the blockchain is about turning information into digital property. It is truly a revolutionary technology that allows people to do things that were not possible before.

Fundamentally, it will enable people to communicate and transact business together without them having to trust each other or needing to use a third party to acting as intermediary or final decision maker. Trust has been decentralized. Eventually this technology will disintermediate (i.e. remove third parties from) any process that can be digitalized. It will help individuals to collaborate, organize horizontally, become financially independent.

One thing leads to another as there would be no blockchain without cryptography, no Internet without the transistor, no transistor without the steam engine and probably no progress at all, or only very limited progress, without the dissemination of ideas, originally made more effective by the printing press and now by the blockchain – exponentially enhancing the creative capacity of the human mind.

History timeline

Co-author: Robert Bold

Originally published on ‘SuperNET & Nxt Annual Report 2015

Continue reading and download the full report. You may also join the Digital Catallaxy mailing list and get the latest from the world of blockchain technologies.