The "Power Trap" of Cryptocurrencies: Why Decentralized Design Is a Buffer Against Potential Systemic Risks

Vitalik Buterin, co-founder of Ethereum, recently published an essay titled “Balance of Power” that sheds light on a critical issue often overlooked by the industry. It is the “crisis management of power structures” that exists on a different level from project growth strategies.

Why Business Models Alone Are Insufficient

Many crypto projects in their development phase focus all their efforts on securing ongoing resources to support team operations. However, as Buterin points out, implementing a “decentralized model,” which should be equally important, is often postponed. The potential risks of centralized power—monopoly control by a single entity, system vulnerabilities, loss of user trust—threaten the success of the business as well.

In other words, sustainable crypto projects need both a “profitable model” and “power decentralization” as two wheels moving in tandem.

The Difference Between Naturally Decentralized Systems and Deliberately Designed Ones

Language systems like English, and open protocols such as TCP, IP, and HTTP, are designed without centralized control points. As a result, they inherently have structures that prevent any single entity from monopolizing control.

However, many crypto projects differ. In these cases, decentralization is not “spontaneous” but is achieved through deliberate, strategic institutional design and structural reforms by the project team. Active choices are required at each stage—such as distributing governance tokens, implementing multi-signature wallets, or establishing DAOs.

The True Challenges the Industry Must Solve

The most emphasized point by Buterin is the question: “Can we eliminate the negative effects of centralized control without sacrificing efficiency and flexibility?” This will likely be the fundamental challenge that the crypto industry continues to face for a considerable period.

Reconsidering power structures is not mere idealism but a matter of long-term project sustainability and user protection. Projects that incorporate decentralized models as a design goal on par with their business models are likely to ultimately earn market trust.