Resource Distribution and Power Dynamics in Decentralized Networks

Introduction

The idealized vision of decentralized coordination triggered by the invention of blockchain continues to attract entrepreneurial and general interest. But while cryptonetwork innovators are obviously onto something unique and interesting, these emerging social systems are far from immune to problems that have plagued human institutions historically.

One way to conceptualize decentralized networks in terms of resource distribution, power dynamics, and governance is to think of these systems as fields. This post explains the meaning of this concept in sociology and how it could be operationalized when analyzing cryptonetworks. A realistic analytical framework for thinking about power and resource distribution early on will hopefully assist in reducing the likelihood of these systems reproducing or even amplifying the various imbalances that characterize the economy as we know it today.

What is a field?

In sociology, the term field denotes a structured social and symbolic setting in which individuals and groups acquire positions and act, and in which systems of meaning, institutions and hierarchies are formed, maintained and challenged.

As arenas of production, circulation and accumulation of goods, services, knowledge and status, the structure of a particular field is determined by the distribution of field-specific resources and, by extension, relations among its constituents.

As individuals and groups cooperate, compete and strategize, they either reinforce or challenge that structure. Under normal circumstances, the participants in a field accept the fundamental rules of the game. Indeed, this acceptance generally serves as a precondition for legitimately entering the field in the first place. But occasionally, these rules — and the power to define them — become actively contested stakes within the field.

Fields are not neutral, open and free marketplaces. At any given time, there are norms, inertia, and other structural forces that make certain development trajectories — for individuals, groups, and the field as a whole — more likely than others. As a result, the reality of a field is not fully reducible to the individual properties of its constituents, but should be analyzed in terms of the structural relations that constitute the field as a whole.

The boundaries of a field are not always clear or fixed and the concept can be applied at various levels of analysis. Consequently, many different and overlapping fields can be identified, from very large social universes such as science, business or art, to much more specialized arenas such as climate research, US retail business, or contemporary Italian painting, to even more narrowly defined microcosms such as a particular network of researchers, a local consumer electronics retail market, or a community of art professionals in a particular city.

Blockchain industry as a whole can be thought of as a field, while individual networks can be analyzed either as sub-fields or as competitors in broader, incumbent-dominated fields. Approaching cryptonetworks from such a perspective is analytically useful because most fields are characterized by similar properties and tendencies. For example:

Various iterations of field theory include additional avenues for analysis (there’s a list of further reading material for anyone interested below), but these are sufficient to raise the following question: what would basic field analysis consist of when applied to decentralized networks?

Field analysis for decentralized networks

In the first approximation, such an exercise would include the following steps, together with some inferences based on the standard formulation of the theory (from here on, the words “network” and “field” are used interchangeably):

(1) Understanding the formal rules of engagement as defined by the protocol and its governance system.

(2) Identifying network participants and stakeholders.

(3) Identifying the resources at stake.

(4) Understanding the historical and current distribution of these resources, including the distribution at network launch and stock/flow dynamics enabled and amplified by the rules of the protocol.

(5) Identifying competitive and cooperative drivers, ongoing conflicts and alliances.

(6) Detailed understanding of governance mechanisms.

Again, more sophisticated iterations of field theory offer additional angles, especially in relation to decision-making and action, but the steps above represent a starting point for describing a particular network or DAO as a field. An important benefit of a field-theoretic perspective is that it lends itself easily to both historical and comparative studies on how different networks evolve and are governed. As decentralized networks grow and mature, such comparative research may become increasingly relevant and insightful.

Conclusion

As long as we’re dealing with human beings, the age old struggle to accumulate power and other resources is likely to remain part of the picture. Time will tell whether the unique characteristics of decentralized networks, as compared to more traditional forms of organization, are sufficient to avoid a tendency towards concentration. Field theory, as a general theory of local social orders, can be applied to frame and analyze these dynamics — a precondition for addressing their more negative long-term consequences.

I’d like to thank Chris Burniske and Alex Evans for their helpful feedback on earlier versions of this text.

Further reading on field theory

Field theory has been developed with varying points of emphasis in different social scientific disciplines. Below is a list of references — some of which were used as source material for this post — for anyone interested to learn more.