Written by Emaad

On April 17, 2020

What is decentralization?

The term decentralization, when talking about blockchains, describes the network architecture. It infers that the network is not localized to central server-based computation. Blockchains are typically a globally distributed network of nodes and/or miners. Emergent properties resulting from cryptographically-secured decentralization are immutability and permissionless-ness.

What are the benefits of decentralization?

Decentralizing user records across a variety of industries would prevent fraud potentially worth billions of dollars. This would protect corporations from being liable for damages caused by stolen user data. Users would be able to have more peace of mind knowing that their private and financial lives are kept safe away from prying eyes. By decentralizing the creation of money, how it is stored, and transmitted, computer scientists have provided the world an alternative financial system that is not dependent on a small group of elected leaders. This financial system offers a contrast to the highly inflationary policies enacted by central banking agencies worldwide.

Other blockchain lessons:

The history of money

The history of money

What is money? Money is a technology that has been as essential to the development of civilization as the wheel itself. Money is any good that is widely accepted as a medium of exchange during the transaction of goods and services. It facilitates commerce by serving...

What is a blockchain?

What is a blockchain?

What is a blockchain? Distributed ledger technologies are based on a concept known as blockchain. The term “blockchain” refers to the basic structure that is a chain of blocks. The “block” in a blockchain is where transaction records or various pieces of information...

What is cryptography?

What is cryptography?

What is cryptography? Cryptography is the study of secure communications. The etymology, or word origin, reveals much of the meaning behind the word. “Crypto”- is the Latin prefix for hidden or secure, while “graphy” means writing.  In computer science, cryptography...

What is a smart contract?

What is a smart contract?

What is a smart contract? Smart contracts are computer programs that run on the blockchain. They are digital agreements encoded or written, with specific sets of rules that govern how and when the contracts will be signed, much like traditional contracts that are...

What are nodes?

What are nodes?

What is a node? A node is essentially a computer on the blockchain that runs network software to recognize and broadcast valid transactions. Nodes communicate which each other and reach consensus, or a common agreement, as to which transactions are legitimate. When we...

What is a consensus mechanism?

What is a consensus mechanism?

What is a consensus mechanism? Consensus refers to the act of coming to an agreement among individuals or groups. A consensus mechanism is the method by which decentralized networks agree on which transactions are valid before being confirmed as legitimate across the...