Are Blockchains Behaving Like Beehives?

I would like to submit a thought that people interested in blockchain and crypto would understand better than others.

Did you know 🐝 𝗧𝗵𝗲 𝗕𝗲𝗲𝗵𝗶𝘃𝗲 𝗣𝗮𝗿𝗮𝗱𝗼𝘅 𝗼𝗳 𝗕𝗹𝗼𝗰𝗸𝗰𝗵𝗮𝗶𝗻 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝗶𝗲𝘀? All large blockchain communities, despite being born with decentralized rules, will always result in centralization.

𝗕𝗹𝗼𝗰𝗸𝗰𝗵𝗮𝗶𝗻 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗮𝗿𝗲 𝗹𝗶𝗸𝗲 𝗯𝗲𝗲𝗵𝗶𝘃𝗲𝘀: decentralized by design, yet centralization emerges as they scale.

That's a property embedded in the rules of nature.

In nature, thousands of bees coordinate in a decentralized way, through elementary self-contained algorithms and simple communication protocols — foraging, cleaning, defending. But one queen becomes the reproductive center. If she dies, the hive looks alive for a while, yet the survival chain is broken and collapse is inevitable.

Blockchain mirrors the structure of a beehive:

𝗪𝗼𝗿𝗸𝗲𝗿𝘀 = everyday participants transacting on‑chain.
𝗦𝗼𝗹𝗱𝗶𝗲𝗿𝘀 = validators and consensus enforcers.
𝗗𝗿𝗼𝗻𝗲𝘀 = miners and liquidity providers.
𝗤𝘂𝗲𝗲𝗻𝘀 = custodians, issuers, foundations reproducing credibility and continuity.

Unlike in nature, blockchain hives often tolerate 𝗺𝘂𝗹𝘁𝗶𝗽𝗹𝗲 𝗾𝘂𝗲𝗲𝗻𝘀 — exchanges, stablecoin issuers, foundations — fragmenting the swarm into overlapping sub-colonies. This poly‑queen structure is both the 𝗶𝗻𝘁𝗿𝗶𝗻𝘀𝗶𝗰 𝘀𝘁𝗿𝗲𝗻𝗴𝘁𝗵 𝗮𝗻𝗱 𝘄𝗲𝗮𝗸𝗻𝗲𝘀𝘀 of the ecosystem.

The 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵: decentralization at the core of the system creates resilience.
The 𝗪𝗲𝗮𝗸𝗻𝗲𝘀𝘀: continuity depends on central “queens.” If a 𝗾𝘂𝗲𝗲𝗻 𝗱𝗶𝗲𝘀 — for example, an 𝗲𝘅𝗰𝗵𝗮𝗻𝗴𝗲 𝗴𝗼𝗲𝘀 𝗯𝗮𝗻𝗸𝗿𝘂𝗽𝘁 — its part of the ecosystem dies.

In fact, the death (bankruptcy) of a queen could destabilize others, in a domino effect and lead to the 𝗰𝗼𝗹𝗹𝗮𝗽𝘀𝗲 𝗼𝗳 𝘁𝗵𝗲 𝗯𝗲𝗲𝗵𝗶𝘃𝗲, propagated by panic; in finance this is called the 𝗛𝗲𝗿𝘀𝘁𝗮𝘁𝘁 𝗥𝗶𝘀𝗸 -- from the name of a German bank, in 1970s, whose bankruptcy nearly collapsed the national banking system, because of the late settlement of transactions.

In the Bitcoin ecosystem in particular, the Herstatt Risk should be seriously considered, because it is an existential risk -- admittedly, it would not kill the blockchain itself, but it could seriously hurt the market value of Bitcoin... making the currency less desirable; and in the extreme, it could make that currency pointless.

Exchanges can take measures to protect themselves against the Herstatt Risk, using the blockchain to settle their mutual debts. However, it can be shown that there will always be a residual risk. And it requires, also, that the community becomes aware of the Herstatt Risk.

👉 The 𝗕𝗲𝗲𝗵𝗶𝘃𝗲 𝗣𝗮𝗿𝗮𝗱𝗼𝘅: decentralized by design, but centralization inevitably emerges with scale. And with centralization comes the concept of 𝗱𝗲𝗮𝘁𝗵, which is a mechanism rooted in nature, which is necessary to any ecosystem. So part of the game for any blockchain community, is to find strategies avoiding the risk of death for the whole colony.

What do you think? Do you see how exchanges could be affected by the Herstatt risk?

(Article adapted from a post on Linkedin).