Decentralization
Blockchain is built on the principle of decentralization. The system in traditional finance is completely centralized.
Customers entrust up complete ownership of their assets to banks, including personal documents.
Bitcoin and other early cryptocurrencies provided a decentralized network and transparent alternative to
centralized banking, allowing for the issuance and storage of money without the need for a central authority.
Decentralized network systems are important because they allow everyone to utilize and build on the platform without needing permission.
Decisions are made via consensus, implying that a group of nodes approves transactions rather than a single node.
These transactions can’t be changed after a consensus mechanism has verified them. As a result, the risk is not concentrated in a single business.
On the other hand, Pure decentralization comes at a cost and speed.
If several confirmations are required before reaching a consensus, the transaction will take longer than if a single party can confirm the transaction.
Bitcoin is recognized for being both fiercely decentralized and not dependent on a central entity.
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