According to a recent paper published by Primavera De Filippi, a researcher working at Harvard University, the governance of Bitcoin is quite centralized. The paper discussed some of the problems that come with crypto, blockchain technology, and decentralization.

The Potential of Blockchain Technology

Filippi noted that the blockchain had the potential to be a disruptive force in numerous sectors by eliminating middlemen. According to the paper, the blockchain enables organizations to try out new transparent governance models that have less hierarchical structures compared to existing models.

The paper noted that in the past twenty years, decentralized collaboration had made it possible to achieve goals that would have otherwise been nearly impossible to attain by a single organization. Filippi goes on to point out that in the existing crowdsourcing model, the crowd does not get to enjoy the value produced equally. However, the blockchain could help to change all that.

Centralization in Blockchain Networks

The paper notes that most existing blockchain networks are highly centralized. She claims that these networks usually have a higher degree of centralization that might be seen. She gave the example of Bitcoin and noted that only a few developers have the skill and knowledge to maintain the network.

Additionally, she pointed out to mining pools. Filippi notes that while validating BTC transactions is supposed to be decentralized, most mining is done by a few huge mining pools. The result is that these mining pools have centralized control of the BTC network. She added that without government intervention, a few powerful actors could manipulate blockchain networks.

However, it is worth noting that while mining pools have a lot of influence in the BTC market, no single pool controls over 20% of the hashrate. Even if the two largest mining pools were to ream up, they would still fall short of the 51% needed to have centralized control of BTC.

The crypto community is also quite aware of this power. As a result, when a mining pool starts to grow too strong, miners will usually move away from the pool into another pool. The result is that mining pools are incentivized to ensure they do not have centralized control of BTC.

Individualism and the Blockchain

The paper also notes that blockchain technology encourages individualism. This is because the trustlessness of blockchain technology lessens the need for people to create strong community ties. The result is that people are less incentivized to bond socially.

The paper urges users to think of ways that can ensure that power distribution in blockchain networks remains decentralized. She notes that most existing blockchain networks are quite inefficient since they are designed to work in antagonistic environments.


While Filippi has identified several key issues in the blockchain sector, none of these issues are insurmountable. Those in the crypto community understand the danger of centralization in a decentralized blockchain and they will take measures from time to time to ensure no one entity controls too much of the hashrate.

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