The recent U.S. troop withdrawals from Afghanistan have shown us that no matter how much hierarchical command-and-control power, decentralization as a core principle, as part of an ecosystem’s ethos, will always be more powerful and resilient in the long run. That’s true whether you’re trying to win a war or to be more adaptive in a corporate setting.
Why do I say this? In 2018 I had the opportunity to do a research note about The CIO’s Role in Creating an Adaptive Digital Business with my esteemed colleague Brian Prentice. As part of that effort, we interviewed Joseph Lubin, co-founder of Ethereum and founder of Consensys, as well as Chris Fussell from the McChrystal Group.
Mr. Lubin talked about creating an adaptive organization at Consensys by learning from the decentralized ethos of Ethereum (see Evolving the Architecture of Business at Consensys). I also had the chance to listen first-hand to U.S. Army General Stanley McChrystal describe how he made the chain of command more adaptive to combat a decentralized adaptable organization such as the Taliban in Afghanistan. (See McChrystal Group Enables “Adaption by Necessity” Within the Joint Special Operations Task Force.)
Why does this matter? Both the Taliban and public blockchains such as Ethereum use decentralization as a design principle. While Mr. Lubin implemented decentralization principles for corporate purposes, General McChrystal did so as part of an effort to win a war. But no matter what the reason, using decentralization is changing the many societal ecosystems. One need look no further than Afghanistan for proof. In the past, The British empire and The Soviets conquered Afghanistan for a period of time but neither was able to impose their centralized power thanks to that country’s naturally decentralized society and geography.
So here’s the so-what question: is this the beginning of the end of the American Empire? Should the U.S. continue to strictly centrally regulate cryptocurrencies, including the issuance of a CBDC? Or should it embrace decentralization as part of the core principles of democracy and free market?