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What is Decentralization?

Centralization vs Decentralizatiom

Credits to Ebenezer Akachukwu.

So if you have not been making home under a rock recently, chances are you would have come across the word ‘“decentralization” more times than you can count, hence I thought it good to begin this publication with the fundamentals.

So what is Decentralization?

According to the Oxford Dictionary, it is “the transfer of control of an activity or organization to several local offices or authorities, rather than a single one”. In simpler terms, decentralization is the sharing of control of a system between its participants. For the purpose of clarity, i will be focusing on centralization and decentralization as it affects human organization.

Participants in a decentralized network

But first, what is Centralization? It is the concentration of control of an organization under a single authority.

From time immemorial, the world has built systems around the concept of centralization. Human organisation might be the most complex field of human effort yet known, and centralization was borne of an effort to mitigate the chaos that organization of human resource. From the family system, up all the way to business and corporate entities, it has always appeared the control of systems from a central point made for better harmony, better organization and management.

However, as with everything else in life, the generally accepted centralization system has not existed without its own points of failure. Some of these include:

  • Centralization has only proved most suitable for small sized organizations.
  • The process of decision making in centrally managed systems has shown to be slow, owing to the control of authority by a single entity.
  • Centrally managed systems require formal means of communication for flow of information. 
  • As a result of delegation of authority to certain persons in central systems, research has shown central systems are liable to bribery and bias in governance and decision making. 

Heraclitus, a Greek philosopher, once said “The only constant in life is change”. Add humanity’s penchant for innovation and change to the above listed issues, enter: decentralization. The equal delegation of control to participants in the system has shown to curb some of the shortcomings of centralization.

  • Whereas centralization has proved mostly suitable for small sized organisations, larger entities have shown more suited to distribution of control. 
  • With decisions not being made by a single entity, decentralized organizations have also shown faster and better consensus in contrast to centralization. Decentralized systems make decisions by arriving at stipulated consensus, which can also bear penalties for defaulting.
  • The risk of bribery and bias is highly reduced in decentralized systems, as you would have to lobby/corrupt a stipulated percentage of its participants to achieve a bias.

From the above, it’s safe to say the concept of decentralization has gained ground with growing dissatisfaction over current governance systems, in politics, in finance, and pretty much any sector that cuts across humanity. Research has also shown some global innovations have been ushered in by groundbreaking work in the Information and Technology industry. This trend has continued with the concept of decentralization.

What is Decentralization in Tech?

Originally, software engineers and developers have built apps and websites on cloud database systems. These databases store information on every single piece of action (data) taken on linked servers. According to a TechTarget definition, “A server is a computer program or device that provides a service to another computer program and its user, also known as the client. In a data center, the physical computer that a server program runs on is also frequently referred to as a server. That machine might be a dedicated server or it might be used for other purposes”

Systems connected to central servers

In simpler terms, when you sign up as a user to websites such as “www.twitter.com”, “www.facebook.com”, with your email and password, your details are sent to the twitter and facebook servers for storage. A copy of these details are also sent to the cloud database being used by either twitter or Facebook, known to you or not. The most popular cloud database currently being used by developers is the Amazon Web Services (AWS). This centralization of user information however has proved problematic as the big corporations such as Google, Twitter, etc, have exploited and used this information to generate revenue for their businesses.

In 2008, a person or group of people by the name Satoshi Nakamoto discovered a new system of storing user data in shared servers, or decentralized systems. This system let developers record data on servers distributedglobally. So in place of centralized data storage, we would be able to save information on computers placed all over the world. This technology was called “The Blockchain”.

Blocks of data chained together in a distributed network

Investopedia defined blockchain as “a distributed database that is shared among the nodes of a network. As a database, a blockchain stores information electronically in digital format”. A blockchain stores data in groups, known as blocks. Each block is constantly filled with information until its capacity, then closed and linked to the previous block. Going by this definition, all anyone needs connect to and use a blockchain is a node, the blockchain programand some internet access. Anybody, anywhere in the world could now volunteer to be a participant in a blockchain and provide data services, simply by subscribing to a node. A node is a computer connected to a blockchain network and executes certain functions like creating, receiving, sending or verifying information on the blockchain.

To avoid information overload, i’ll be breaking this publication in parts. In the next feature, we’ll be throwing more light on terms such as the blockchain, nodes, blocks, node providers, and learning what are the different models of decentralization.

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By ugochukwu.eth on Substack

Sharing knowledge on Cryptocurrency, Web3, Blockchain, and Cryptography

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