One of the most alluring things about crypto assets that attracted the attention of users in the first place was the fact that crypto was the first truly decentralized currency.
But what does this really mean and why is it so important?
Well, let’s find out!
What is decentralization?
By definition, decentralization is the distribution of functions and powers.
However, in the crypto sphere decentralization means that the technology behind crypto (Blockchain) doesn’t have a single point of control, instead control is distributed between individuals involved in the system.
The system of any crypto-asset (bytom, bluecoin) is a distributed ledger, which consists of blocks. At the same time these blocks are collections of data that is added to the block as it connects to other blocks. After adding this data can’t be removed from the ledger.
So what are the benefits of a decentralized network?.
Little likelihood of corruption
The biggest issue with centralized authorities is that they always strive to extend their area of influence and take control of every part of the system.
Take governments for example.
In socialist countries, such as the former USSR, although everything usually began with good an intention such as equality or ending poverty, the country eventually turned into a tyrannical dictatorship.
Although you can argue that this won’t always be the case. One thing is certain, once all power is in the hands of only some people, abuse and corruption will follow.
This is one of the main reasons why we need decentralization more than ever. In a decentralized network, the power is distributed among individuals so that no one can have a considerable effect on the system.
Immunity to inflation/deflation
Crypto assets are decentralized networks and not controlled by a single entity, thus a country’s internal conditions don’t affect them. There is also a finite number of them.
In Venezuela, for instance, hyperinflation has been happening since 2008 and the inflation rate has already surpassed 1,000,000%. Many citizens turned to Bitcoin as their saving grace from the inflating currency.
Thus, crypto assets have the ability to become solutions to the issue of inflation.
The highest security can be achieved only in decentralized networks as there is no single point of failure in this kind of system. So let’s say a part of the system failed, the whole system will still go on.
This is a crucial advantage of decentralization.
Of course, there have been concerns with the crypto exchange, hot wallet or coin tracker hacks in the past, however, the solution to this is keeping your coins safe in hardware or other high-security wallets.
Crypto transactions have been praised for their speed, safety and low costs.
Compared to traditional fiat transfers that can take up to 48 hours, cryptocurrency transfers are instantaneous. On the other hand, crypto transactions are irreversible, which means that they can’t be undone like in traditional banking systems.
In recent years, censorship on the internet became a topic for many heated discussions. As the internet and social media websites shape people’s views as never before, the idea that they have the ability to censor certain opinions or people that hold those is very disturbing.
Decentralized networks, in contrast, are meant for everyone and no one can be censored in this environment. Although this gives way to many questionable persons, it also gives people freedom.
In conclusion, decentralization is secure, uncensored and uncorrupt and, as Steve Jobs used to say, it just works. If you want to become a part of this decentralized network and obtain some crypto coins but don’t want to spend all of your time on them, you can use crypto trackers. If you’re not sure how to do so, take a look at this cryptocurrency portfolio tracker guide.