Paper 2013/829

Is Bitcoin a Decentralized Currency?

Arthur Gervais, Ghassan Karame, Srdjan Capkun, and Vedran Capkun


Bitcoin has achieved large-scale acceptance and popularity by promising its users a fully decentralized and low-cost virtual currency system. However, recent incidents and observations are revealing the true limits of decentralization in the Bitcoin system. In this article, we show that the vital operations and decisions that Bitcoin is currently undertaking are not decentralized. More specifically, we show that a limited set of entities currently control the services, decision making, mining, and the incident resolution processes in Bitcoin. We also show that third-party entities can unilaterally decide to “devalue” any specific set of Bitcoin addresses pertaining to any entity participating in the system. Finally, we explore possible avenues to enhance the decentralization in the Bitcoin system.

Available format(s)
Publication info
Preprint. Minor revision.
Contact author(s)
ghassan @ karame org
2014-03-05: revised
2013-12-16: received
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Creative Commons Attribution


      author = {Arthur Gervais and Ghassan Karame and Srdjan Capkun and Vedran Capkun},
      title = {Is Bitcoin a Decentralized Currency?},
      howpublished = {Cryptology ePrint Archive, Paper 2013/829},
      year = {2013},
      note = {\url{}},
      url = {}
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