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Benefits of Decentralization

Hardly anyone not living under a rock will have heard terms like ”decentralization,” ”cryptocurrencies,” and ”blockchains” thrown around this year. Although all of these concepts can seem diffuse to a layman, their increasing impact on society is undeniable.

Governments and corporations are exploring decentralization

For example, different governments around the world are announcing blockchain initiatives in rapid succession. Corporations are also betting big on the future potential of blockchains, with hopes that they’ll be able to increase transparency.

Moreover, cryptocurrencies have likewise made a significant splash this year. Although 2018 has been characterized by substantial cryptocurrency losses following last year’s all-time highs, the discussion regarding cryptocurrency shows no signs of slowing.

Decentralization is the central concept that underpins both the notion of blockchains and cryptocurrencies. However, this ultimately begs the question – what exactly is decentralization?

The term can be somewhat elusive and seem ambiguous for those new to it. However, the underlying concept is actually quite straightforward. The key to decentralized technologies, such as blockchain technology, is that they do not rely on one central point.

Traditional systems often require a single actor to oversee and facilitate processes. Although this is a workable solution, it gives the centralized actor a significant degree of control over the system itself.

This means that any prospective user needs to relinquish control to a single government, individual or firm; whomever the central actor may be. This means that users will have to invest their trust in the centralized actor.

Moreover, this also means that different processes become prone to failure, sabotage or takeover – as they hinge on a single central actor on which the entire system is built. Such processes, systems or networks are referred to as centralized. Continue on toshitimes.com

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