Decentralization Only Matters If Users Win
By: Andrej Radonjic, co-founder of Wynd Labs
There’s a lot of talk about decentralizing AI, but decentralization only matters if it’s user-centric. The data that fuels today’s powerful LLMs is generated by billions of users around the globe through their queries, posts, and interactions. Yet these users are completely cut out of the equation.
Decentralization offers a way to fix this imbalance, but to simply say we’ve done it misses the point. Peer-to-peer systems often sacrifice performance for their own sake without solving real problems. Decentralization must be about realigning incentives.
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Incentives always drive the outcomes
Today’s AI infrastructure wasn’t designed to be extractive. It just followed the incentives. How did we get here?
I don’t believe that the companies dominating this space are inherently evil or set out to do harm. As I’ve argued before, these companies had the right intentions. What’s broken is the incentive structure–one that rewards the accumulation of web data at scale without regard for how the data was sourced or who created it. Companies have been incentivized to collect as much data as quickly as possible.
If we want a better system, we need a better set of incentives. We must build a system where users aren’t just passive participants in AI’s growth. Instead, they should be empowered to become contributors with a real stake in the process. This is where decentralization can retool the system–by shifting control away from a few and back to those who are making AI possible. If we want a different system, we need different rules.
Decentralization isn’t automatically the fix if it makes systems slower, less efficient, or harder to use. To become a tool for structural change, decentralization must be tied to real-world incentives and aligned with user interests.
Centralized systems, by contrast, can, at times, bring value. The railroads that connected the country in the 19th century were a major effort of centralization. They also empowered a few small companies with monopolistic control. Yet the net result was transforming travel for everyone at a scale not possible beforehand.
Today’s AI systems are fueled by a centralized infrastructure as well. In both cases, centralization comes with a cost, concentrating power and disconnecting users from the systems they helped create. At its current pace, AI continues to operate under a system of incentives where users are disempowered. They are unknowingly providing data for multimodal systems.
Decentralization needs a purpose—and blockchain gives it one
Blockchain is a missing piece we didn’t have during the rise of Web2. Back then, there was no way to coordinate users at scale. No way to let people collectively own or control the rails of the internet or to align individual participation with shared infrastructure. We saw how quickly data and attention were monetized, with users caught in the middle.
Now we have the tools to do things the right way. Blockchain and cryptocurrency allow us to build systems where users can verify, participate in, and profit from the data flows they generate. They offer direct incentives and tamper-proof coordination—exactly what’s needed to counterbalance the closed-loop feedback systems that dominate AI today.
If the internet’s data is the raw material for AI, then blockchain offers the first real way for people to reclaim control over how that material is gathered, valued, and used. Decentralization must always have a purpose, which in this case is giving people the tools to own the future they’re helping to build.
Crypto isn’t Web3—but it can save it
Web3 is often misused as a synonym for crypto, but it’s been my view for a while now that crypto is not “Web3.”
The trajectory of the internet today isn’t much different from the shift that took us from Web1 to Web2. Over the last ten years, users have moved to fewer platforms with data in fewer places, which has only consolidated the internet’s power and surveillance state.
The “real” Web3 is AI. If we aren’t careful, we will hand over the same type of control that we conceded in the Web2 era. Crypto is how we avoid this fate. Power must be reallocated with a direct tie-in to user incentives. We can give Web3 a real shot at delivering on the promise of an open, equitable, and user-driven Internet.
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A force equalizer for an equitable revolution
AI models will become as powerful as the data they can access. The future of AI relies on open access to a global system of data–it’s up to us to decide whether the resources powering that data collection are built on user consent and empowerment.
Decentralization enabled by blockchain and cryptocurrency gives us the chance to ensure the internet is open and aligned with user interests. By realigning the incentive structure, we can prevent the same type of monopolization that defined the Web2 era.
Incentives drive change. The models under development will require even more data. We can only shift how companies approach data collection by changing the incentive structure and putting users first. We have an opportunity to do things differently and build a fairer, user-first incentive structure.
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