Challenges in the cryptocurrency industry: Redesigning the power structure is an urgent task

ZKProofEnthusiast · 2026-01-09T10:32:51+00:00

Vitalik Buterin discusses fundamental challenges facing cryptocurrency projects in his article "Balance of Power." He highlights the conflict between business models and decentralization, emphasizing that prioritizing the former can undermine long-term stability. He proposes that achieving decentralization requires intentional design, especially in areas where power tends to concentrate. The balance between efficiency and decentralization emerges as a crucial task for the industry.

ZKProofEnthusiast

2026-01-09 10:32:51

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According to reports on December 31, Ethereum co-founder Vitalik Buterin addressed the fundamental challenges faced by cryptocurrency projects in his latest article, “Balance of Power.”

Business Models and the Dichotomy of Decentralization

According to Buterin’s analysis, many current cryptocurrency projects grapple with a contradiction during development and operation. Project teams tend to focus on building “business models” to ensure liquidity of funds. Meanwhile, the design of “decentralized models” that distribute power structures within the project and prevent systemic risks often receive secondary consideration. This imbalance in priorities can potentially undermine long-term stability.

Naturally Distributed Areas and Areas Requiring Deliberate Design

Interestingly, Buterin states that the difficulty of achieving decentralization varies greatly depending on the project’s domain. In language systems like English, and open protocols such as TCP, IP, and HTTP, it is extremely difficult for a single entity to establish dominance. In these fields, decentralization naturally emerges as a logical outcome.

However, not all use cases meet these conditions. Many blockchain projects and DAO operations require more than just technical specifications; careful organizational planning and institutional frameworks by the project management team are essential. To prevent power from concentrating in a single center, clear intent and strategic architecture are necessary.

The Next Major Challenge: Balancing Efficiency and Decentralization

Buterin emphasizes that the future of the cryptocurrency industry will hinge on developing methods to maintain rapid decision-making and operational efficiency enabled by centralized systems while simultaneously eliminating risks associated with excessive concentration of power.

In response, the advice to project management is clear. They should deeply reconsider existing power structures and prioritize achieving “decentralization” as an equally or more important aspect of system design than building the business model. Striking this balance will be crucial to realizing the true value proposition of cryptocurrencies.

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