Decentralization is, amongst many others, one of the main reasons why crypto peaks the interest of the everyday traders and consumers. The idea that truly owning your currency is something that shouldn't be passed up. Generally, big banks and governments around the world control the economy and the money flowing in and out of it. With this being said, you never truly "own" your money. This is where decentralization comes into action. Having a decentralized network allows you to have full control over your money and even allows you to earn more interest in certain cryptos via staking (Algorand, VeChain, Ethereum V2, etc) than you would if you held your money in a bank's savings account.
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This is not financial advice. I am not a financial advisor.
Please do your own research before making any decisions before investing.
This article is meant for educational purposes only.
Decentralization is made possible via blockchain technology and is most popularly ran on the Ethereum blockchain via smart contracts. On this blockchain, developers can launch their own financial protocols and platforms that are programmed to run a specific way from the beginning and heavily coded and encrypted. These different cryptos on the platform are bought, sold, and traded amongst one another without having to rely on a bank or government to approve the transaction. This gives everyone with an internet connection (to perform these tasks) the freedom to exchange cryptocurrencies with anyone around the world. Another plus side to decentralization is that, since it's not controlled by a government, you do not have to worry about currency exchanges (ie USD --> EURO).
While you do have to pay a fee to exchange or transfer coins and tokens on the blockchain, the end-goal is to have these fees be small enough to make trading worth it. Fees differ in price from crypto to crypto and are generally based on the total amount of traffic occurring on the blockchain, so they may change in price with each transaction. With the transparency in decentralization and the way blockchain technology works, at least you will know how much the fee will be upfront without having to worry about extra surcharges or "fine-print" hidden fees. The blockchain will work exactly to code and will not waiver for any individual.
You ever hear of a financial institution being hacked? Here is current list of just that happening. Your precious, hard-earned money is heavily encrypted in a decentralized blockchain system. Given that each transaction has a unique code and record that must be verified and stored by other nodes on the blockchain, this makes hacking into the blockchain extremely difficult. While nothing is ever impossible, the increased transparency of each transaction on the blockchain gives the individual full confidence that their money is secured within their crypto wallet. Yes, a crypto wallet, because that is the most secure way to hold onto your cryptos. It's the safest way because that is when you truly own your crypto keys and can do as you please with them. Yes, you should probably get your coins and tokens off your exchange wallet as soon as possible. Check out this article about a crypto exchange CEO "vanishing" after stealing over $2 Billion worth of investor funds. You probably don't want that happening to you!
Looking forward, what does decentralization mean for us, the everyday individual? I think it means the future. Decentralization has the power to completely overthrow our traditional methods of conducting transactions. It gives everyone who owns a decentralized currency (crypto) the power and freedom to own and control their own finances with complete finality with the use of blockchains... all over the world.
What does decentralization mean to you?
Let me know in the comments down below and we can all have a discussion about what it means for all of us!
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