Centralization, CBDCs, Data and the Four Horsemen

Part 7 of 12 — Blockchain: Decentralization of Money, Power and the State Originally written as a History BA thesis, academic year 2021–2022. Published online August 2026. Series index → · References & bibliography →

Centralization and Decentralization of Power

When we talk about blockchain ecosystems, we tend to take for granted the existence of associations of individuals, or of individuals and machines, united by common purposes. DAOs, or Decentralized Autonomous Organizations, resemble cooperatives. These organizations tend to limit the authority of the individual, be it even a secretary without formal powers, through the help of cryptography. This is possible through smart contracts, which, for example, may require digital signatures (wallets) from multiple people for governance processes.

Centralization of power and IoT

As an example of how times are changing and how the centralization of power is shifting, two examples will be cited. The first case took place in 1972 and saw women, residents of Ostia council houses, oppose the increase in utility bills¹ . Their solution was simple: they got together and decided that the market price was not sustainable by deciding to pay a lower price. In order for the energy company to cut off supplies, the meter had to be disconnected manually, physically, analogically, and this gave them bargaining power. Nowadays, meters are remotely deactivated, which does not allow the end user to decide whether or not to pay. What we want to emphasize is not the ethics or morality of the gesture, but the bargaining power, which has disappeared with technological progress. Technology in this case has favored centralization, disfavoring the power - already small - of ordinary people.

The second example is more topical. Until a few years ago, the turnstiles of the subway in Milan were easily bypassed, leaving the traveler with the moral and ethical choice to pay or not to pay the ticket. The new types of turnstiles, being higher, do not allow overriding and thus remove all choice from the end user. In both examples we see a binary, top-down choice that precludes any possible action by the user. The machine, be it the meter or the subway stamping machine, only checks whether the obituary has been paid: yes/no; on/off; 0/1. Binary logic has its roots in classical logic. The rule of the excluded third from the Aristotelian tradition clearly shows how A cannot be not A. What is interesting to note is the pervasiveness of this logic, which, if in the past it had the ability to influence human processes with binary-type reasoning, sees in the present (and in the near future), a spotty enlargement on so many other activities.

Power, thanks to sensors and actuators, multiplies its controllers, its good people, extending its very long arm over everything.

Decentralization

An interesting point to make about blockchain is the so-called trilemma between decentralization, scalability, and security.² It does not seem to be possible to increase one of the three without adversely affecting the others: by 'scalability' is meant the adaptability of a si stem to a growth in users and thus in transactions: by 'decentralization' is meant the concentration of power; and by 'security' is meant resilience to cyber or other attacks.

You need to know this to realize how much more difficult a decentralized system is to set up and run properly than a centralized system. To increase speed there is sometimes a tendency to centralize something. This should not come as a surprise, since similar problems can also be traced in problems that, at first glance, may appear to be of a different kind.

The analogy with the two graphs is not limited to geometry. It is very similar to the previous one, although it is applied to policy, and shows how difficult it is to balance policy decisions while respecting the principles expressed in the three points of the triangle.³ The three points that are difficult to achieve are comparable: democracy, as it is the absence of centralization; capital mobility, which is equivalent to the scalability of a system; and monetary autonomy, thus being able to mint money, to the security factor.

Now that the concept of blockchain should be clearer, it is time to reflect on whether it is really a form of decentralization or multi-centralization. In fact, transaction records, while not enclosed within the walls of a bank, do not involve distribution, but a copy at each node, i.e., a center. Since there is no central authority everyone becomes a center. ⁴

Central Bank Digital Currencies (CBDC)

For the past few years, people have begun to talk about CBDC. It is supposed to be the institutional answer to digital currency. The main difference is that CBDCs, as the name implies, are centralized systems that use blockchain technology to write transactions. When centralized blockchain systems were previously mentioned, we were referring to geographically decentralized computer systems, thus redundant to a possible attack or incident, but centralized at the logical level. Such a system is obviously more efficient than a logically decentralized system, simply because it goes to recreate a hierarchical type of mechanism. With CBDCs only those who have authority over the platform (such as institutions) will be able to get their hands on the code, inserting new rules that citizens will have to submit to. These rules can be the most varied, covering, for example, the expiration of the currency, how it can be spent, who can spend it, with whom, etc. Obviously, as tried to explain in the section on IoT, many things, which are not such now, will become transactions: opening the front door, getting married, taking an exam, etc. With centralized digital currency, institutions would thus have a great deal of power, being able to decide, in a world where everything is transaction, who can transact and who cannot.

The importance of data

A society such as ours is profoundly influenced by data, which, on paper, should be a truer expression of a purported objectivity. The informational importance that flows from them, and the consequent policy-level decisions that are drawn from them, require proper reflection.

The application of legislative and legal principles developed under the pretense of objectivity leads to the elevation of data from mere indicators of a reality to the constitution of the only possible reality, and to the consequent and very dangerous attitude of: "The data ask us," making any decision legitimate as not political, but technical. We know well how the employee mentality, through individual deempowerment, and a tight hierarchical chain, were very important ingredients for the tragedies of the 20th century. Data, as an expression of a reality, could take away space from other realities, less measurable, less analyzable, but no less real. At a time when data become, through the processing of artificial intelligences, what provides impulses for human beings to perform actions, we should remember that data, like sources, are never neutral. And so, the same questions that a historian asks when he or she sees a source should be repeated when faced with data: why were they collected? Why that data and not others? Cui prodest?

The Four Horsemen of the Infocalypse

JULIAN: But it's just excuses, the Mafia and foreign spies, it's just excuses for people to accept such a system. JACOB: The Four Horsemen of the Infocalypse: child pornography, terrorism, money laundering and the War on Certain Drugs.⁵

Near the Columns of San Lorenzo in Milan, there is a plaque in front of the Colonna Infame. On it is written a sentence by Alessandro Manzoni, taken from the little book of the same name, removed from his famous novel.

"It is a relief to think that if they did not know what they were doing, it was because they did not want to know, it was because of that ignorance that man assumes and loses at his pleasure and is not an excuse but a fault."

Those who have read The Infamous Column already know that Manzoni addresses his reproach to those who, despite being educated and having power, decided to welcome and instrumentalize the story of the anointers: Manzoni could not believe that those men in power were in good faith, for him there was malice. Today we no longer talk about witches: witches are part of what is fairy-tale: at one time witches and anointers represented the picklock to be able to legitimize state violence and with that the maintenance of the status quo. What are those things in today's society that make people sensitive enough to accept control? One accepts the presence of law enforcement to defend us from what is 'evil'; however, it is well known how what is 'good' and what is 'evil' changes over time, and that appeals to the moral sphere are not as objective and simple as is sometimes simplified. In the global network called the Internet, where all information is free, lurk the Four Horsemen of the Infocalypse: they are child pornography, terrorism, money laundering, and the War on Certain Drugs.⁶

It is likely that many would reject the eye of Orwellian Big Brother in their homes-the privacy implications would be obvious to all. With the Internet and the applications that use it, however, it is more difficult to realize this. So many people might be frightened, perhaps rightly so, by the four horsemen mentioned above. The resulting fear, however, is the same fear that frightened people in the days of anointers or witches: an atavistic feeling that prevents reasoning and accommodates every demand that comes from above. It is very convenient for politicians to pass a law to control the Internet, using child pornography or terrorism as workhorses, about which very few people would object. The issue is very important, however, because if the data can be accessed to check whether what is sent contains terrorist or child pornographic elements, it can also be accessed for other types of checks. Once you have the key to the lock you can open everything and there is no way to control the controllers. This is why privacy activists advocate solutions that cannot be compromised even by authorities (privacy by design), because minimal control equals total control. Understanding the power dynamics present on the Internet, how they work and how they are more beneficial to those who propose them than to those who accept them, should be the first step to true emancipation, a word which, without this awareness, remains empty.

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