The Decentralization vs. Hierarchy Debate

Hello friends!

Welcome to the 5th post in the systems thinking series! In today’s post, I’ll talk about the ongoing tension between decentralization and hierarchy, which I think everyone who’s into blockchain governance faces at some point (me included).

Is Decentralization Really That Great?

When decentralization is talked about (particularly in crypto communities), it’s addressed as the ideal. Think about it: no single point of control & power spread across a network, it’s an internet democracy! But then systems thinking asks: does that even work in real life? Sometimes, pure decentralization stalls. People vote, but nothing gets implemented. Everyone sends proposals, but no one’s coordinating. The system ends up with no direction.

Why Hierarchy Is Still Important

Think about DAOs, are core teams a failure of decentralization? Absolutely not. People think hierarchy is bad, but it helps bring structure and clear roles. That’s why it keeps showing up even in decentralized systems. Systems do need some structure to move forward, but when hierarchy takes over, power concentrates and transparency fades. You get speed, but you lose trust.

BTC vs ETH

Two perfect examples of a good balance are Bitcoin and Ethereum, where this tension plays out clearly. Bitcoin focuses more on stability and minimal change. Its slow-moving governance is intentional. Ethereum adapts quickly, with a more flexible and open development process.

Conclusion

Systems thinking teaches us that the key isn’t to reject hierarchy, but to design it intentionally. The most resilient systems allow for self-organization and provide just enough structure to keep things aligned. That’s how decentralization actually works, a system that knows when to hold and when to let go.

Until the next hash, Abed.