Decentralization Drivers for Purposeful Decentralization of Distributed Ledger Technology Systems

Distributed ledger technology (DLT) is seen as a key technology to decentralize information systems (IS). However, DLT systems that are perceived to be decentralized often inadvertently centralize, as exemplified by the potential of large mining pools to manipulate consensus in the Bitcoin blockchain. In this manuscript, we tackle the problem at the system design stage and review and distill decentralization drivers for purposefully decentralized DLT systems. We identified 35 candidate decentralization drivers by reviewing whitepapers and documentation of 32 layer-1 DLT systems, assessed their impact on the decentralization of the overall DLT system, and distilled them into 18 unique decentralization drivers. To facilitate interpretation of these drivers, we grouped the reviewed layer-1 DLT systems into six archetypes with similar decentralization characteristics and pointed out what drivers are of particular relevance to achieve decentralization in DLT systems with decentralization use cases akin to one of the archetypes. Our research contributes to the engineering of more purposefully decentralized IS by consolidating extant knowledge on IS decentralization in the DLT domain and serving as a foundation for the design of decentralization-oriented DLT systems.