Blockchain-Based "Decentralization": A Rorschach Test for Normative Priors regarding Competition

In 2021, the Bank for International Settlements identified that blockchain-based finance was laboring under a “decentralisation illusion,” because of “the inescapable need for centralised governance and the tendency of blockchain consensus mechanisms to concentrate power.” In other words, notwithstanding that blockchain is a decentralized technology, it cannot live up to its promoters’ promises that it will disperse economic control. This Chapter surveys accumulated evidence that supports and underlines the importance of that conclusion. This Chapter also argues that individuals’ continuing susceptibility to narratives about the decentralizing potential of blockchain technology reflects, at least to some degree, their normative priors about the degree to which concentration of economic power is acceptable. In other words, blockchain-based finance can serve as a Rorschach test for attitudes towards the normative goal of “competition.”