The ins & outs of decentralization?—?Stuart
When you use a decentralized network, you aren’t beholden to a central authority for the service the network provides. This is true of Bitcoin, as you don’t need to rely on a bank or another institution to send or receive payments; however, it applies to other networks as well. For example, if you use a blockchain-based social network, you don’t have to rely on a central server. This means the network can’t be shut down as long as a single node is active. Of course, the network may not work as well if a single node is the only active node, but it will still work.
How Decentralization Works
When you use a decentralized network, you don’t rely on a single node or a few nodes. Instead, you rely on a large group of nodes. Decentralization has two main benefits, each of which relates to security.
- It makes attackers work harder. If you want to attack a centralized network, you can simply attack the central node. If you want to attack a decentralized network, you’ll need to attack all of the nodes. Attacking a single node is easier than attacking all of the nodes, which means you can make the network more secure with the same amount of resources.
- It makes attackers work faster. If you want to attack a centralized network, you don’t have to worry about other nodes. If you want to attack a decentralized network, you’ll have to attack all of the nodes before the network can get back up and running. This means you’ll need to attack all of the nodes simultaneously, which means you have to invest more resources into the attack. Decentralized networks are more secure, but they’re also more expensive to attack.
Why is decentralization bad?
Many people believe that centralization is bad. But few people realize that decentralization is also bad. The fact that decentralization is bad is not a new idea; it has been discussed since the invention of the word itself. When we talk about decentralization, we are in fact talking about more than just that. The word decentralization is a synonym for the word ”deconcentration”.
Decentralization is the process of dispersing power from a central source; for example, a king or an oligarchy, to multiple sources. Decentralization also means the process of dispersing power to local or regional sources, or to small communities. Decentralization is a very complicated process and it is hard to manage. It requires a well-organized community, a good management, and many other things. Communication must be very well organized to avoid chaos and anarchy, and this is why good management is essential in the process of decentralization.
“Decentralization is not bad because it is bad, but because it is hard to manage!”
The process of decentralization is a process of deconcentration. Deconcentration is the scattering of power, a process that happens when a single source of power becomes multiple sources. When there is a single source of power, that means that there is a single point of failure. When there are multiple sources of power, that means that there are multiple points of failure. If there is a single point of failure, it means that if the source of power fails, the whole system fails. If there are multiple points of failure, that means that if one of the sources of power fails, the system is still operational.
Where is it good to keep central authority?
The answer is “somewhere”. But not “everywhere”. It’s good to keep central authority in the location of your money, your computer, your documents, your passwords, your identity, your reputation. It’s good to keep central authority in every system that, were it to fail, would cause you to lose money, time or freedom. The benefit would be the central authority becomes a liability for the safety of the info held within. But there is the issue with data safety and security.
This is why decentralization of data/info is important is for keeping identity, reputation, document storage, etc. out of the hands of those who want to exploit it for profit (selling data). You want these things to be decentralized, but you don’t want to make the mistake of thinking that decentralization alone is a desirable goal.
So we’d need a combination of a central entity that we can communicate with if things go to shit, and a decentralized means for keeping info safe.
“Decentralization is inevitable!”
The reason why the “decentralization is inevitable” argument is wrong is that nearly all technological revolutions have increased centralization, not decreased it. When the telephone was invented, it did not lead to the death of the telegraph. The telegraph was far more decentralized than the telephone, and yet it died out. When the steam engine was invented, it did not lead to the death of the windmill. The windmill was far more decentralized than the steam engine, and yet it died out. When the printing press was invented, it did not lead to the death of the hand-copied manuscript. The hand-copied manuscript was far more decentralized than the printing press, and yet it died out. The same pattern holds for cryptocurrency. Bitcoin is far more decentralized than the Federal Reserve. Bitcoin is far more decentralized than the dollar. Bitcoin is far more decentralized than the gold standard. If the Bitcoin project continues to succeed, it will eventually become far more decentralized than the gold standard. If you are a fan of decentralization, you should be rooting for the success of Bitcoin.
Having a central authority is key for user interaction, but decentralization is key for user safety.
How do you combine such a matter?
There have been some proposed solutions in the crypto world such as Decentralized Autonomous Organizations. These systems are still new and are becoming fragmented as more platforms with DAO’s come to market.
Time will tell, but I think a mix between both will be the long term resonance of systems that deal with user data.
What do you think about decentralization?
Follow me for my crypto / DeFi to expedite your knowledge!
Book a FREE appointment with me ?? DeFiknowledge.com
?? Twitter ?? Stuart (@DeFiKnowledge) | Twitter
