The interesting equilibrium between centralization and decentralization

Enrique Dans
Enrique Dans
Published in
4 min readAug 11, 2022

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IMAGE: A network of interconnected, loosely formed grey tridimensional cubes symbolizing the blockchain and decentralized finance
IMAGE: Shubham Dhage — Unsplash

The idea of a balance between centralization and decentralization came to me from a conversation with another IE University professor, Ikhlaq Sidhu, in which we were trying to understand what factors affect this balance: if we start from biological systems, there are functions that develop in a decentralized way, such as touch, versus others, such as circulation or information processing, which are centralized in specific organs such as the heart or the brain. Obviously, the question is functional: a non-decentralized sense of touch would make very little sense when it comes to picking up stimuli from the environment, but even in that extreme case, the sensors are decentralized, while processing is still centralized in certain specialized areas of the brain, where the nervous system sends stimuli received by mechanoreceptors, thermoreceptors and nociceptors.

In general, the balance between centralization and decentralization depends on factors such as the level of coordination required and the technology available. Hence, when technologies emerge that strongly impact the way information circulates, making previously impossible coordination possible, this tends to provoke major change, even to the point of breaking down the previous power structures.

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Enrique Dans
Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)