# Recentralization `kaal:entity:recentralization` **Status.** derived This node is assembled mechanically from the 7 claims that carry the concept tag `recentralization`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 7 claims across 4 works, 2018 to 2024. **2018** - [3227933-019](https://wulfkaal.github.io/claims/3227933-019) [failure/argued] *(failure mode)* -- Most current blockchain applications lack complete decentralization: proof of work style validation has produced mining pools because of economies of scale and unbalanced reward structures. > For instance, the traditional mechanism for validating and verifying a new block of transactions – e.g., Bitcoin's proof of work protocol - has led to "mining pools" as a result of economies of scale and unbalanced reward structures. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 **2019** - [3406323-023](https://wulfkaal.github.io/claims/3406323-023) [failure/argued] *(failure mode)* -- Because cryptocurrencies embody a transferable store of value, the exercise of power over that value inevitably leads back to centralization through economies of scale, creating core points of attack that undermine the very nature of decentralization. > Because of the store of value entailed in cryptocurrencies (and really any currencies or store of value), exercise of power over such value inevitably leads to centralization due to economies of scale. Wulf A. Kaal, Decentralization - A Primer on the New Economy (2019). SSRN: https://ssrn.com/abstract=3406323 - [3406323-035](https://wulfkaal.github.io/claims/3406323-035) [mechanism/argued] -- Reputation avoids the recentralization dynamic that afflicts currencies because it must be earned and can be lost yet cannot be converted into a fungible store of value exchangeable for goods. > Reputation as a metric and store of value does not suffer the same consequences and does not lead to centralization because it must be earned, it can be lost, yet it cannot be turned into a fungible store of value that allows the Wulf A. Kaal, Decentralization - A Primer on the New Economy (2019). SSRN: https://ssrn.com/abstract=3406323 - [3411897-028](https://wulfkaal.github.io/claims/3411897-028) [failure/argued] *(failure mode)* -- Because cryptocurrencies embody a transferable store of value, the exercise of power over that value inevitably leads to centralization through economies of scale, which creates core points of attack and undermines the very nature of decentralization. > Because of the store of value entailed in cryptocurrencies (and really any currencies or store of value), exercise of power over such value inevitably leads to centralization due to economies of scale. Wulf A. Kaal, Decentralization - Past, Present, and Future (2019). SSRN: https://ssrn.com/abstract=3411897 **2024** - [4796714-012](https://wulfkaal.github.io/claims/4796714-012) [failure/argued] *(failure mode)* -- Recentralization is the central obstacle to using blockchain and distributed ledger technology to govern AI: the recentralizing tendency of these networks interferes with their capacity to deliver effective AI governance. > Alas, recentralization may interfere with blockchain and DLT technologies' ability to effectively govern AI. Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714 - [4796714-014](https://wulfkaal.github.io/claims/4796714-014) [failure/argued] *(failure mode)* -- Proof of Stake consensus centralizes control in proportion to the quantity of tokens held, so governance built on such chains is skewed in favor of the wealthy rather than distributed. > Similarly, Proof of Stake (PoS) consensus mechanisms, as implemented in Ethereum and other blockchains, centralize control based on the quantity of tokens held, potentially skewing governance in favor of the wealthy. Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714 - [4796714-015](https://wulfkaal.github.io/claims/4796714-015) [mechanism/argued] *(failure mode)* -- When decentralization at the Layer 1 level is compromised, the autonomy of the smart contracts deployed on that chain is compromised by affiliation, so smart contracts are corruptible in the current design and cannot reliably serve as neutral instruments of ethical AI governance. > When the decentralization of Layer 1 blockchains is compromised, the autonomy of smart contracts is inherently jeopardized, undermining their effectiveness as tools for ethical AI governance. Wulf A. Kaal, AI Governance (2024). SSRN: https://ssrn.com/abstract=4796714 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/recentralization.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.