What is Decentralization?
One of the most exciting aspects of blockchain technology is that it is entirely decentralized, rather than stored in one central point. This removes the need for powerful central authorities and instead hands control back to the individual user. Here we will examine how this system works, what it means for our future and why it is so revolutionary.
What is Decentralization in Blockchain?
The decentralized nature of blockchain technology means that it doesn’t rely on a central point of control. A lack of a single authority makes the system fairer and considerably more secure. The way in which data is recorded onto a blockchain epitomizes its most revolutionary quality: its value of decentralization. Rather than relying on a central authority to securely transact with other users, blockchain utilizes innovative consensus protocols across a network of nodes, to validate transactions and record data in a manner that is incorruptible. As a blockchain is a ledger of information it is extremely important that the information being stored is honest and accurate.
What is a Consensus Protocol?
A consensus protocol is a set of rules that describe how the communication and transmission of data between electronic devices, such as nodes, works. Consensus is achieved when enough devices are in agreement about what is true and what should be recorded onto a blockchain. Therefore, consensus protocols are the governing rules that allow devices that are scattered across the world to factually come to an agreement, allowing a blockchain network to function without being corrupted.
As the system does not rely on a central authority, the fees that are normally collected by these organisations are no longer a factor. Therefore, transacting on the blockchain can be seen to be cheaper, as the only costs incurred by the parties involved are the nominal fees used to reward the miner or forgers that run a node on the network.
Furthermore, the information recorded on the blockchain can be certain to be true as it is near impossible to manipulate due to there being multiple copies that require a complex consensus to be edited. On top of that in combination with the role played by cryptographic hash functions in the system.
The data is made even more secure by the fact that there is no reliance on a central point of storage, reducing the risk of it being lost or destroyed. Attacking one point of storage would result in no loss of data since all the information is stored on multiple devices around the world. In this regard Bitcoin is the most weathered and resilient platform in the space, having withstood barrages of attempted hacks, all of which have been unsuccessful.
Those who participate in the blockchain network have the option to contribute their computer memory and download a copy of the blockchain to secure the data that is recorded on it.
Is Cloud Storage Decentralized?
Decentralization is not to be confused with traditional cloud storage. Data that is stored in the cloud is not stored directly on a device but still kept on one central server elsewhere. Unlike blockchain, this is still very much a centralized solution. Data that is stored on the blockchain is not stored on a single device, but rather distributed across many different devices across a P2P network.
When discussed in the context of blockchain this is normally in reference to storage of data such as a transactions. Therein lies the decentralized nature of blockchain. There are also blockchain platforms that offer decentralized cloud storage solutions, wherein any file can be broken up and stored on different hard drives, offered up by other people on the network in return for cryptocurrency rewards.
Finally, the lack of a central body collecting information ensures the privacy of users remains intact and uncompromised, a right that has been rigorously eroded in recent history. Without giving a single entity unrestricted access to all data, the risk of an abuse of that power is nonexistent. As such, the distributed and decentralized nature of blockchain technology also gives back ownership of private and personal data to the individual user.
At first glance, a network where users data is scattered across different devices, controlled by various people could seem counterproductive to preserving privacy. However, due to the complex cryptography that blockchain employs and the limited personal information required to participate, this is not the case at all.
Blockchain Privacy Explained
Since the dawn of the internet, the privacy of the individual user has been been in a consistent and steep decline. Blockchain technology reinstates this basic human right. In this segment we will examine what aspects of blockchain play a role in rebuilding privacy and why it is so important.