The decentralization theater – all show and no substance?
Decentralization is the highly praised principle behind blockchain and the technologies it spawns. One of the great promises is nothing less than the democratization of finance. But the criticism is growing louder: DeFi and other crypto systems are not developing in the direction hoped for, but are rather delivering decentralization theater – an illusion.
A brief definition: decentralization theater refers to any system that does not decentralize, but only creates the appearance of decentralization). This means that concepts like DeFi are still subject to centralized control and that power and influence can also be concentrated within the Blockchain. Even large future projects such as Web3 are subject to criticism from the decentralization theater. Ownership of blockchain networks is not evenly distributed, but is heavily subject to the influence of early adopters and venture capitalists.
Of course, one can now ponder whether decentralization is even the solution to everything and whether centralization does not have its advantages. In any case, the big technologies raise big questions: Will the promise of democratization through decentralization be kept? Is pure democracy possible through technology alone, or is it human nature to center power sooner or later? The answers to these questions will only emerge over time.