What is Decentralization

Why is it key to Digital Assets?

Decentralization occurs when individuals or nodes work collectively in a distributed manner to achieve an objective without reliance on a centralized intermediary.

09:55 mins

Guest Speaker:Lucas Tcheyan, Research Associate

Description

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In this episode, we’ll discuss the concept of decentralization and its paramount significance in the realm of digital assets. Decentralization, a core attribute of blockchain technology, is explained as the collective and distributed effort to achieve objectives without relying on centralized intermediaries. Contrasting centralized and decentralized networks, we explore how decentralization can provide superior security, resilience, and scalability. Drawing from historical examples and the evolution of the Internet, we unveil why most digital assets favor public blockchains and embrace decentralization. We also navigate the crucial trade-offs and advantages of decentralization, shedding light on its potential to revolutionize how internet services are built. Join us into decentralization and its profound implications for digital assets in the modern era.

In Summary

A quick summary of the topics discussed in this lecture.

Decentralization can have scalability and safety benefits.

A public permissionless blockchain is a digital, decentralized, distributed ledger that doesn’t rely on single centralized authorities or institutions.

Most of the biggest cryptocurrencies use decentralized public blockchains.

Tokens can provide economic incentives, allowing for a potentially better Internet (Web3), where more decentralization is possible.

There are trade-offs that need to be considered, such as the lack of a central governing authority that can be held accountable.

Decentralization can potentially provide three main advantages, depending on size and structure of the network: (a) Fault tolerance, (b) Attack resistance and, (c) Collusion resistance