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Decentralized: Is it Important?

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Avatar for Charmy
Written by   137
3 months ago

We are living in an increasingly interconnected world with 4.66 billion people connected to each other by the Internet. We pay each other, share data and communicate with each other within seconds.

I'm sorry but all of that is a lie. The truth is we are not connected with each other instead we are connected with centralized multinational companies and data merchants who we are forced to trust with everything we do.

Well it's the reality most people are living in and today I'm going to talk about why we need decentralization.


In short it is the transfer of control and decision making from a centralized entity an individual, organization, government or company to a distributed network.

Those decentralized networks reduce the level of trust that people have to place in each other and significantly reduce the ability of any centralized entity to exert authority or control over that network.

  • One of the most popular example would be Bitcoin Cash and this feature is the key reason why it's so valued in the crypto community.

  • No single entity can stop you transferring Bitcoin Cash to another person.

News is everywhere about their account has been shutdown for the crime of buying cryptocurrency.

Internet is Centralized

The Internet has a massive place in your lives and I'm pretty sure that everyone uses platforms like Amazon, Facebook or Twitter.

Internet centralization runs much deeper. To understand that, I'm going to explain how the Internet works.

Let's say that you wanted to visit a website like Amazon to order the latest tools you need or gadgets. Most of us just typed in the URL of Amazon into our web browsers then land on the site and don't think about it any further.

Everything you see on that website is actually hosted on a server. Your computer or smartphones sends a request to that server to view the website.

That request is known as a packet. Those request packets include core bits of information like the IP Address of the server where the website is stored and your IP Address.

Router send that packet from your computer or device to the via fiber optic cables that server could even be located on the other side of the world. Once the server gets your packet it opens it up, reads your request and splits up that data you need to view into a ton of different packets.

Those packets contain information on how they should be put together and where they from. Those packets are sent by the server back to your computer. Once your device gets them they are put back together and allow Amazon to be displayed on your screen.

That's an incredible process in just a second but here's the major centralization with the current Internet.

Who controls the server?

That would be the Web Services Company like Amazon Web Services. Amazon Web Services host over 9 million live websites.

That's 9 million websites that amazon could decide to play god with. I hope you can now see how the current infrastructure of the Internet is highly centralized.


  • February 28, 2017 - Many of you probably had trouble with or experienced outages for websites and services. Tons of websites went down and the cause is it was due to a problem with amazon web services servers.

In other words, a slight problem at Amazon temporarily broke the Internet. This centralization issue is also present in the Internet routing or DNS system.

Centralization in the DNS Network can also lead to a massive issues if their services go down.

How Can Decentralization Help?

One of the major goals amongst of the blockchain startups in cryptocurrency is to build a decentralized version of the Internet where it is immensely difficult for any single entity to gain control.

A system that all users can immediately verify and immediately trust. Blockchain is able to achieve that and thanks to the network being spread out across lots of different nodes.

This is commonly known as WEB 3. So if these blockchain pioneer can pull it off gone will be the days of personal data collection.

Data collected that cannot be controlled by the users themselves and data which is sold to advertisers or stolen by hackers.

Another cool thing about Web 3 is that money would be native to the Internet so instead of having to rely on traditional financial infrastructures like banks and all the restrictions that come with them, people could transact quickly globally and in a permissionless manner via cryptocurrencies.

That in itself could spawn new business models and economies overnight.

Decentralization and Money

Traditional payment system is being used every day. What all these traditional payment methods have in common is that they are all highly centralized.

Most people just use that visa card and don't think too much about it. The problem with this system is that payment providers like cards or banks can deny service to anyone they want.

That means your bank can just say that you've bought cryptocurrency and we don't like that so we're going to exclude you from banking with us or even worse is freeze all your funds.

Things are getting more alarming when you look at countries like China.

Basically if you are a business or financial institution you have to do whatever chinese communist party says. That includes sharing things like user data and personal information.

So if you lived in China then you can be sure that the old CCP could get all your transaction data if they wanted it.

Why does that matter?

Well if you think democracy is a good thing and took part in those Hong-Kong protests a while ago then the Chinese government could work out if you attended that protest by looking at your transaction history.

It would be as simple as seeing if you had bought a train ticket to an area where the protests were happening. That's actually why so many protesters used cash to pay for public transport.

Then you have the issue of payment providers being like gods and dictating which businesses can succeed and which ones they're going to refuse to serve.

Decentralization and ID

Verifying your identity today can be annoying. You have ID verification for things like online banking or that social media account that you are building at.

How are you verifying your identity there? Well with a password. The reason why you need all those different passwords is because traditional businesses are siloed.

That means identity is also siloed. This is why you have dozens of accounts for different services and multitude of usernames and passwords.

However in a decentralized Identity framework the users receives all their credentials like drivers licence, health records, government ID numbers, university qualifications, etc and you get to store them in a digital wallet.

The user can then use that wallet to prove their identity to any company that ask for it and the company can verify that the piece of ID information is correct via a blockchain based ledger.

So if decentralized blockchain-based IDs were a thing then you would be in control of all that ID information and you would get to choose who you share with it. Even better you wouldn't have to walk around with wads of documents or have to remember numerous passwords anymore. Instead you might just scan a QR code on your phone to prove that the person accessing that service is you.


Well that's it for today. You've learned how the world we live in right now is highly centralized and about some of the concerns that stem from that. People are only just beginning to wake up when it comes to the danger of centralizations.

Do you think this decentralization will come to pass? Let me know and have a good day.

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Written by   137
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