I became interested in Bitcoin reasonably early and was fortunate to invest in some early mining (although as with all good investments in retrospect not nearly enough). There is currently a fight brewing in Bitcoin world with the possibility of a hardfork a la Ethereum into two different currencies. Much like the Ethereum fight and resulting hardfork, emotions among the people close to it are running high. If you are inside this community, the stakes seem incredibly high. But it is moments like that when it is good to take a step back and assess where we are.

The marketcap of Bitcoin and Ethereum combined at the moment that I am writing this is $21 Billion and change. If you add in the 98 biggest currencies you get to $24 Billion. For comparison, the marketcap of Google alone is nearly $600 Billion. So a single centralized player today is 20x the bulk of the value of all decentralized currencies.

You could choose a different statistic and ask how many people use systems powered today by a decentralized foundation. Unfortunately it is harder to come by statistics here, but towards the end of last year there were fewer than 2 million bitcoin addresses with more than 0.1BTC  (about $100) in them. Presumably quite a few of these belong to the same people. If you go down to 0.01BTC ($10) you go up to only 5 million addresses and even at 0.001BTC ($1) you are at about 10 million addresses. Now it is likely far fewer people because many people have multiple accounts with a few BTC in them. For comparison, WeChat alone, which is largely a China phenomenon, has 700 million active users. So again there is more than an order of magnitude difference.

So yes, the fights in the decentralized world matter to those of us who are in it, but we should not forget that for now we are a pimple in the face of centralized systems around the world. And I suspect that will be the case for quite some time. Why? Because the vast bulk of endusers don’t yet care about decentralization. There are no tangible benefits for them and mostly downsides in terms of systems that are cumbersome and risky to use.

If you have been around long enough this will remind you strongly of the early days of open source and free software which goes back at least to 1983 with the GNU Project. Linux got going in 1991 and MySQL in 1995. While today open source software is widely used it was a two decade plus road to get there and closed source is still a massive business. Bitcoin by comparison is only 8 years old, Ethereum a mere 2 years.

So my expectation is that centralized systems will serve the vast bulk of users quite well for many years to come until their innovation slows down, they become too extractive and onerous in other ways and at the same time blockchain-based decentralized systems become stable and easy to use. I expect that to be at least a decade long road ahead.

To be clear: I believe that going down that road is incredibly important and at USV we plan to continue actively investing in decentralization. It is just important to develop some perspective about where we are and how long it will likely take for blockchain-based decentralized systems to have the kind of impact on the world that open source has today.