In Code We Trust: Blockchain’s Decentralization Paradox
Sangita F. Gazi | 27 Vand. J. Ent. & Tech. L. 59 (2025)
This Article explores blockchain technology’s decentralization and governance challenges. It interrogates the tension between the idea of a trustless, decentralized economy at the core of blockchain’s promise and the realities of power concentration and information asymmetry. Examining the ramifications of the Crypto Winter of 2022 on trust and governance within the blockchain ecosystem, the Article also underscores a critical paradox within blockchain ecosystems. It argues that despite the foundational ethos of decentralization and open participation, the governance structures of major blockchain networks manifest significant centralization, challenging the narrative of an egalitarian, user-driven evolution. The current state of blockchain’s centralities fundamentally incentivize participants to be opportunistic. In light of the collapse of several blockchain organizations in 2022, this Article highlights the danger of blockchain’s centralities. It posits that, without an effective governance regime established by network participants, blockchain’s tragedy will continue to destroy the network’s valuable resources. Finally, this Article stresses the need to design a fully polycentric blockchain system, from both operational and governance aspects, to incentivize network participants and stakeholders to act in the interest of the community rather than in their own interests.