How decentralized is the crypto sector?

As an expert for the implementation of decentralized blockchain projects, Dr. Nina Siedler not only gained a lot of experience in terms of regulation, but also analyzed which factors repeatedly lead to the centralization of systems. She is one of the very first lawyers to deal with crypto regulation. She processed the first crypto legal cases back in 2016 and hasn’t come out of the so-called rabbit hole since then.

In the conversation, we wanted to know how decentralized the crypto sector is, why a decentralized state would be less vulnerable and what legal form DAOs take in Germany. You can find the full interview on the BTC-ECHO Experts Podcast.

BTC-ECHO: How decentralized is the crypto sector?

Nina Siedler: It started with Bitcoin and Ethereum, both of which embody quite decentralized structures. Then the industry started experimenting with these technologies, after which there was an about-face. Proof of concepts were typically not really structured decentrally, but rather centrally. Also, the consortia of proof-of-authority networks are not truly decentralized. Ultimately, decentralization is something gradual. You can’t say it’s decentralization from this point in time or that point in time. It’s a gradual transition. I do believe that there is value in having an infrastructure that is not unilaterally dominated by one player or a small group of players.

Is decentralization a weakening of the state?

I am convinced that, if done in the right way, decentralization could mean an enormous strengthening of our society. Above all against the background of international terror, which is increasingly directed against the general public. What we have seen in the last ten or fifteen years is actually a relative lack of choice. Ultimately, highly centralized structures make us enormously vulnerable and vulnerable to attack. Examples of this are the Baltic Sea pipeline or the collapse of the railways throughout northern Germany because two lines were cut. As a result, one can see that it would be healthier for our society to organize the essential infrastructures, such as the digital infrastructure, in a decentralized manner. It just makes her less vulnerable. Many do not yet recognize this added value and put it behind the need for regulatory control.

The regulatory classification of decentralized, autonomous organizations (DAOs) is difficult in Germany. Which legal form would be possible?

We are currently seeing the DAOs fleeing Germany. These then set up foundations or foundations abroad. To be honest we would have to target some kind of membership organized vehicle. In Germany we have above all the association for the non-profit sector and the cooperative when it comes to promoting the economic interests of the members. Actually, we should then deal with these two vehicles.