Abstract
This work analyses blockchain-mediated decentralization based on a systematic review of the scholarly understanding of the term ‘decentralization’ across multiple disciplines from computer to political sciences, examining how its various meanings are reflected in popular discourse on blockchains and distributed ledgers. The paper aims to capture the rigorous cross-domain understanding of decentralization and its most important features, and to map the commonalities and differences between it and some closely related concepts such as distribution, disintermediation and peer-to-peer (P2P). Across all domains, decentralization appears to be used as a solution to problems requiring non-trivial coordination across heterogeneous stakeholders. Blockchain-mediated decentralization appears to have unique characteristics reflecting an idiosyncratic set of authority-related values prevalent in so-called ‘crypto’ online communities. Within blockchain space, the article argues against the binary positioning of ‘decentralization’ and ‘centralization’, proposing a dialectical approach and arguing that a system’s authority allocation is a quality positioned on a spectrum between purely decentralized and completely centralized, noting how a blockchain set-up could simultaneously both have facets that are significantly centralized and others that are not. The authors document their systematic review findings and propose a framework for understanding blockchain-mediated decentralization, suggesting a definition, and outlining new directions for further human-centric research into distributed ledger technologies and for designing decentralized ecosystems.
Highlights
Decentralization means the dispersion, delegation or distribution of power away from a central authority1
It was found that decentralization was mostly perceived in a positive and/or mildly neutral light and that the most important theoretical argument in favor of technologically-mediated decentralization was that it could facilitate desirable outcomes of socio-technical systems by improving their overall efficiency via mechanisms motivated by qualities such as transparency, accountability and resilience
The centralized loci of authority that these ecosystems are setting out to avoid range from central banks and big publishing houses to Big Tech infrastructure providers, and the type of power that is being dispersed in the process is usually related to breaking up functional silos and cutting out those middlemen that proved inadequate in existing systems that were deemed unfit for purpose, more scientific rigor is required in capturing and measuring the dissatisfaction with the relevant centralized solutions, all of which needs to be further formalized
Summary
Decentralization means the dispersion, delegation or distribution of power away from a central authority. Blockchain is a type of computer-mediated socio-technical approach using distributed ledgers to enable online transactions without apparent central authority. The idiosyncrasies with which the term “decentralization” is used within the blockchain space have generated confusion, especially since computer science already had its long-standing discipline of distributed systems research, equipped with its own vocabulary that focuses on “distributed,” rather than decentralized, technical set-ups. A technological classification would categorize blockchains as a type of peerto-peer and a serverless distributed system, without necessarily calling it a decentralized one, suggesting that the sources of meaning of “decentralization” in blockchain contexts are not necessarily technological in nature, motivating the need for the present effort
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