Definition ∞ These are potential drawbacks or vulnerabilities inherent in systems designed to operate without a central governing authority. They can include challenges related to governance, security, scalability, and user accountability. The absence of a single point of control can introduce complexities in dispute resolution and protocol upgrades.
Context ∞ Discussions surrounding decentralization risks frequently involve the potential for governance failures, the concentration of power among a few key stakeholders, or vulnerabilities in smart contract execution. Analysts are evaluating the trade-offs between decentralization and operational efficiency. Key considerations include the robustness of consensus mechanisms and the susceptibility of decentralized networks to external attacks or internal collusion.
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