Decentralisation

The Key diff b/w Centralisation & Decentralisation

Centralisation is what all the big companies are. There is one huge ass entity which is incharge of basically everything or every service that it has to provide and follows a type of pyramid structure, which means all the fundamental or vital decisions are taken by a handful of people, which doesn't sound too right, no?

The issue w this structure is that, these handful of people have way too much power with them, they can decide what services to provide to whom and/or in what manner. In this whole structure, the beneficiary or the victim is the consumer class which doesn't have a say in the decision. For eg, Instagram’s CEO decided that they should have short video form content and hence IG reels was born, and today it directly impacts all of us but did we have a say in this?

🔰

Obviously there is a board of directors or investors who do have a say in the vital decisions but again it’s just a handful of people who have that sort of power and not us.

This is the primary concept and the applications/shortcomings of it are limitless. However, for the crypto industry, we’d limit ourselves to applications that are related to DATA or MONEY.

Now coming to the decentralisation part, it’s pretty self explanatory, we take that concentrated power from handful of people and divide it amongst different groups of handful of people. For an eg we can say that different divisions within a company follow the same principle, however unlike any company wherein there is a division above all these divisions, decentralisation doesn't have anything as such.

Again, this is the primary concept and the applications/shortcomings of it are limitless. However, for the crypto industry, we’d limit ourselves to using this concept over on blockchain.

🔰

This might not make sense rn because it deals with Smart Contracts and Blockchain Technology, so you may refer to this later, This decentralisation concept works with different nodes along the blockchain. Since most of the proficient blockchains have adopted smart contracts, they tend to self execute themselves as per the conditions are fulfilled. Smart contracts are also related with nodes which sometimes serve as a checkpoint on different blockchains. Since the smart contracts are designed to be execute themselves w/o any human interference, they decrease the chances of any sort of mishap or fraud to happen. Also, since it’s on blockchain it’s in the public’s eye which increases transparency and provides more power to the public.

When it comes to blockchain, we see decentralisation adopted when it comes to Distributed Ledger Technology (DLT). Don’t get scared away, Ledger simply means a record of all the transactions, in terms of data, and this ledger is distributed along a long chain, hence DLT.

Now, why is this good, why should we use it and all of the other questions, I’ll address in the next edition which would talk about Blockchain.

Attaching a good sample,

(Pictorial representation of the centralised, decentralised & distributed network.)

To sum it up,

Centralised Network: Power concentrated at one single point, in essence, to a handful of people. Decentralised Network: Concentrated Power distributed to different groups of handful of people. Distributed Network: Different checkpoints that are distributed along the network.

Thanks for Reading.

Leave your feedback/questions down.