‘Partial centralization’ in cryptocurrency: Is the goal already defeated.

‘Partial centralization’ in cryptocurrency: Is the goal already defeated.

By Dzoelx | Scripts | 17 Jul 2020

There probably exists little differences in our different definitions of what decentralization really means and what we infer when we say ‘decentralized’, but basically we refer to a process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.

How this works for different organization may differ, but it relatively involves moving away from the normal concept of ‘a central authority’ and distributing authority to the majority or as many as the members involved. Shifting power from the few and circulating the mantle of authority to the majority is thought to be a perfect way or ‘giving power to the people’ in real sense and make for a more just system of governance.

For cryptocurrency and blockchain technology, this is more of a technological concept but also an administrative approach as well.

Blockchain technology itself forms the bulk of the technological approach to decentralization in the cryptospace. The blockchain is a ‘chain of blocks’, Blocks are permanent stores of uneditable data/information , these includes information such as agreements between the parties in the transactions, the name of the sender, name of the recipient and the amount transacted, a block could store just any information, in cryptocurrency transactions which is the most popular context of blockchain application, a block holds records of all recent transaction, however, for a new information to be stored, a new block must be created which has a reference to the previous block as information cannot be added to the previous blocks and it’s information cannot be edited, to store a new information, a new block must be created.


Each block contains a record of data and an identical hash (a cryptographic code) which identities the block. To ensure more security and stability of the blockchain, the blockchain servers (node) are run by each user of the blockchain, every user running a node verifies each block before it is created.

Blockchain developers hopes to create an automated form of distributed consensus mechanism and ledger system where every member of the ecosystem where the consensus algorithm is a cordial agreement. Depending on the consensus algorithm in use, blockchain decisions are arrive at via certain ‘just’ mechanisms. For every transaction on the blockchain, every active member of the ecosystem verifies the transaction in an ecosystem devoid of manipulation.

The blockchain is presented as a secured immutable entity devoid of manipulations and providing a distributed decision-making authority.

On the other hand, decentralization in cryptocurrency is not only a technological term, community management in cryptocurrency also involves some decentralization of authority and represents the administrative approach to decentralization in cryptocurrency.

Cryptocurrency projects are always backed by a community made up of its developers and investors who believes in the visions of the project and have invested not only their money but also their time and a tangible energy to ensure that the projects succeed, at least according their personal desires. The development team of other individuals coordinating these projects develops a leadership structure where decisions are ‘community-driven’ and the community agrees on a decision-making approach.

Many cryptocurrency projects define themselves as ‘decentralized’, both administrative and technologically.

‘Decentralization’ is arguably the most popular word in blockchain technology and cryptocurrency, but unfortunately, this is in fact an illusion in many blockchain and cryptocurrency projects, not only in the technology itself but also in every aspect of management of the community of supporters and users of the cryptocurrencies and as well in the community of contributors to the technology. Unarguably, one of the major goals of blockchain technology and cryptocurrency is to create an ‘embezzlement’ free economy and a decentralized community free from third party influences and manipulations by the ‘higher-class’ individuals.


Most cryptocurrency communities have struggled to accomplish the vision of creating a perfectly decentralized ecosystem, majority of blockchain and cryptocurrency projects have been labeled ‘scam’ primarily due to technological inconsistencies and obscure moves by the development and promotion team. While most of these projects have defeated this negative tag and have stood up as ‘genuine’, the scar still remains and the cause of the initial ‘scam’ name tag is still left untreated however people have only come to believe in these projects because the development and promotion team have successfully proved beyond doubts that they are ‘here to stay’ and not actually because they have satisfied the people’s crave for transparency in financial transactions and decision making. Many blames this misunderstanding on the claim that ‘the people want more’, but everyone would want more from which was supposedly instituted to serve them…especially when that’s not the case anymore.

Where decentralization really exists, ‘the majority leads’ at all times, most times or at least where it matters most such as important administrative and financial decision making. But this is not the case as we have seen in some unfortunate events in the crypto space where some very important decisions which affects the whole community have been taken without due consent of the community and the ‘ruling’ minority have once again taken full powers in a system which was thought to be made for and ruled by the people.

Most popular cryptocurrency projects fall into this category, and while they portray themselves as ‘truly decentralized’, they are in fact another form of centralization, or partial centralization. While most of these projects have only failed at either the technological or administrative aspect of decentralization, some others have actually failed at both and have consistently shown the irrelevance of a distributed consensus mechanism. Unfortunately, this defect spans across most relevant cryptocurrency and blockchain projects and is as a matter of fact is a rapidly spreading ‘plague’.

As this plague spreads, the idea of blockchain technology is shifting from decentralized to partially decentralized and totally decentralized in some cases. Well, many projects are ‘constructively centralized’, the community is deemed relevant, but this relevance only comes in when the decisions are not really important, major decisions are ‘team-driven’ or ‘founder-driven’.

In cases like this, the goal is of a decentralized ecosystem is defeated and the community is once again degraded in terms of importance, hence creating the common scenario of centralized systems and taking us aback. Cryptocurrency is deviating from the initial goals in many ways, but decentralization tops this list for the fact that it is though to be the major selling point of blockchain technology.


Programmer|blogger|freelance writer | twitter: https://medium.com/@joelagbo


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