What is Dectralization?
Decentralization is the transfer of control of an activity or organization to several local offices or authorities rather than one single one. In a blockchain, decentralization refers to the transfer of control and decision-making from a centralized entity (individual, organization, or group thereof) to a distributed network. By decentralizing the management of and access to resources in an application, greater and fairer service can be achieved.
Let us simplify this further:
When a system is controlled by a single entity (organization, group, or individual), it is said to be centralized, whereas when it is run by all the participants of the system itself, it is called decentralized.
For example,
Suppose a company owns a server comprised of 10,000 computers with a database holding all of its client's account information. This company has a warehouse containing all of these computers under one roof and has full control of each of these computers and all the information contained within them. Similarly, blockchain consists of thousands of computers, but each computer or group of computers that hold this blockchain is in a different geographic location and they are all operated by separate individuals or groups of people, i.e. a decentralized system is collectively maintained by a distributed network of computers. Each computer (or device) that joins the network is referred to as a node.
Hence, a system is decentralized if its participants are able to connect either directly (peer-to-peer) or through a network of nodes that are not centrally managed, i.e. there is no third-party / middleman / higher authority controlling them.
Last updated
Was this helpful?