Modern decentralized systems exhibit a little discussed property. I call it the Small/Big Dualism. It is a direct result of the internet’s existence. As I’m going to explain in this piece it’s of major importance when thinking about decentralized systems. While the underlying developments are not new, I haven’t come across the particular framing I present here which is useful when analyzing and developing decentralized systems in our age.

Before the arrival of internet-based information technology, whenever a system was decentralized — as in: the system’s entities were distributed and largely autonomous — all the entities used to be rather uncoordinated. Thus, they couldn’t profit from certain benefits that unarguably stem from being big (economies of scale, power, public awareness etc.).

This has changed. The underlying effect is well known, at least among internet thinkers. Ben Thompson for instance hints at it when he speaks of his Aggregation Theory concept (emphasis added by me):

“Previous incumbents, such as newspapers, book publishers, networks, taxi companies, and hoteliers, all of whom integrated backwards, lose value in favor of aggregators who aggregate modularized suppliers — which they don’t pay for — to consumers/users with whom they have an exclusive relationship at scale.”

This is the effect created by platforms.

If we take a more abstract, analytical look at it, all platforms from Uber to AirBnB, from Facebook to Google aggregate and thereby organize and coordinate autonomous entities. Every single driver on Uber, the smallest entity on its supply side, is an autonomous economic subject. But at the same time, by providing the relevant information — in the case of ride hailing that’s data like current location, vehicle type, availability, personal driver data etc. — the platform or aggregator is enabled to coordinate all the entities.

Note that such a system is predicated on information flowing between the small/entity (driver) and the big/aggregator (Uber). What is limited¹ in Uber’s case but important for other systems of similar type is the flow of information between all the entities.