Decentralization: When and Why

Decentralization - Need of the hour

With a centralized authority in place, better coordination is achieved. But as we saw in the previous chapter, centralization comes with its own shortcomings. The biggest downside is the abuse of power.

In such cases, decentralization has great significance. The concept of decentralized networks laid the foundations for the evolution of Bitcoin blockchain. Decentralized networks aren't controlled by a single authority or a single node. Each node in the network share processing power and decision making processes. The nodes are independent and are distributed across the globe.

If you are doubtful why blockchain calls itself to be decentralized, it is just for the reason that under blockchain, there is a dispersion of functions, powers, people, or things, very much contrasting to a centralized network. For instance: Decentralization in terms of authority comes when no single party has authority over a network. Decentralization in terms of location happens when there is no single location where the network focuses its resources. When it comes to the blockchains, neither there is any central authority governing the network nor any data stored at a single point. Instead, it is distributed among the different nodes. The decentralization property thus makes blockchain an immutable and reliable source of information, sprinkling trust over every proceeds.