Unlocking the Power of Decentralization: Exploring a New Era
In the modern landscape, decentralization has become a captivating buzzword that sparks the interest of technology enthusiasts, activists, and entrepreneurs. It signifies a transformative shift away from conventional centralized systems. Dispersing power and control throughout a network rather than consolidating it under a single authority. Within this section, we delve into the diverse interpretations of decentralization. Examing how blockchain pioneers have harnessed these definitions to drive technological advancements. To grasp the concept of decentralization, envision it as a transfer of authority that revolutionizes traditional structures. Prepare to embark on a journey that unlocks the immense potential of decentralization and ushers in a new era of innovation.
At its core, decentralization refers to the distribution of authority, power, and decision-making across a network of participants, rather than relying on a central entity or intermediary. It aims to eliminate single points of failure and create more resilient, transparent, and inclusive systems.
There are three main forms of decentralization, or how authority is transferred. In a post on Medium, Vitalik Buterin, one of the founders of Ethereum, detailed the following three forms of decentralization:
Architectural (de)centralization — how many physical computers is a system made up of? How many of those computers can it tolerate breaking down at any single time?
Political (de)centralization — how many individuals or organizations ultimately control the computers that the system is made up of?
Logical (de)centralization — do the interface and data structures that the system presents and maintains look more like a single monolithic object, or an amorphous swarm? One simple heuristic is: if you cut the system in half, including both providers and users, will both halves continue to fully operate as independent units?
Let’s get specific with an example. The computer or tablet on which you are reading this was very likely, make by a company with a CEO and a board of executives. This company is very likely structured to have business units that take care of various components of building, marketing, and selling the device you are using.
The CEO and the board of executives provide direction to the different business units so they can work together to build computers. If the company were to split up, the CEO and board of executives would have to decide (or be incentivized) to split the company up. The individual parts of the company could not decide to do that on their own. If the part of the company that assembles the keyboards decided they no longer wanted to be part of the larger company, they really do not have the choice to break off into another company. According to Vitalik, this means the company is logically centralized.
Another example that Vitalik uses is language. The speakers of any language follow grammatical rules and best practices despite the fact that there is no centralized authority forcing people to speak a certain way. Organizations that publish dictionaries do not have direct control over the language. People who speak the language are the ones with control over it. This is why languages evolve over time, with structure and character depending on the place and time in which it is expressed. An example is how Latin evolved over time into the modern day romance languages of Spanish, French, Italian, Portuguese, Romanian, and Catalan. No central authority decided that Latin should evolve into these languages. In this case, language is something that is logically decentralized.
In the case of blockchains, they are politically decentralized because no one person has singular control over them. They are also architecturally decentralized because their infrastructure has no central point of failure. As each node keeps a copy of the blockchain. But, blockchains are logically centralized because the system behaves like one computer despite being spread apart on all the participating nodes in the network.
Decentralization (politically and architecturally) allows blockchains to be:
- Less likely to fail because they rely on many separate components.
- Harder to attack because the networks are spread across many computers.
- Harder for users with malicious intent to take advantage of users who are using the platform for its intended purpose.
If one node stops working, or even 100 nodes, the blockchain survives assuming there is at least one node up and running. This makes the blockchain very resistant to attacks. The blockchain does not stop working even if the power is lost in an entire country. This makes the blockchain very resilient, which cannot be said of many of the existing systems we use on the Internet.
Currently, companies like Facebook, Amazon, and Google dominate the Internet. They offer many free or cheap services . Beucase of, they are able to collect valuable data on their users, and find ways to monetize that data. As a user of the modern internet, one is never too sure where their demographic and personal data is being used. Through the implementation of decentralization, also called Web 3, data does not have to be stored in centralized systems. Data can be verified independently and individuals can transact directly with each other. Instead of requiring a centralized entity to verify these interactions.
Micropayments become a feasible method of being rewarded for value created. Users control how their data is used and accessed over the Internet. User can be paid for the use of their data. Decentralization dis-intermediates central control of systems. Instead of a single company being responsible for writing information to a centralized database. The responsibility of recording transactions falls to anyone who wants to participate in a blockchain. This is a significant shift in thinking, but important in understanding how blockchains could be revolutionary. They are different both philosophically and technically. They are specifically engineered to be an alternative to the centralized systems we are familiar with.