What is Decentralization?
As the name suggests, the term decentralization is contrary to the word centralization which means control of activities and authority of decision making for an organization is in the hands of a central unit. Decentralization is dispersing this power among all the people participating in the network. This concept is achieved when all the peers agree to some consensus and execute the necessary amendments. Hence, it creates a trustless scenario among the peers where no individual is responsible of the consequences of the actions as a result of the agreement.
Now having a gist of this concept, lets compare centralization and decentralization more specifically.
This corresponds to every system that requires an intermediary authority to validate exchanges between two customers. This authority governs all the rule and regulations of the process and has full power over customer's data. This requires third-party trust that leads to limited security. Secondly, the extent of transparency of the system is in the hands of that central authority. This builds a wall between customers and service providers that is more prone to frauds and questions the reliability of the system.
This system is in the use and has been relied upon since centuries. Many examples can be drawn from the current scenario, like banks, supply chain productions, record keeping, data registry, asset validation, transactions and the list goes on.
An alternative to the widely established system, it comes with providing true and complete ownership to the people of their data. It distributes the power of governance to the participation individuals in the network. This ensures transparency, reliability and security over a dispersed network keeping track of their assets and validating each transaction by agreeing to the consensus protocol designed for that specific network. No individual has the authority over the entire system.
The concept of Decentralization proves to be the solution to the problems of a centralized system. Many businesses and organization have adopted this concept successfully. It is believed to modify most of the industries and give people the power of governance.
Next we'll look into the implementation of this concept in the newly emerging technology, Blockchain.