What Is A Decentralized Network?
A decentralized network consists of interconnected, geographically distributed, and independently controlled computers.
Computers in a network are called nodes. On a decentralized network, no single entity controls enough nodes to impose unilateral decisions on the network. Instead, a consensus mechanism makes network-wide decisions.
Not all distributed networks are decentralized. However, all decentralized networks are inherently distributed. Independent parties must control the nodes to ensure a network’s decentralization, which also requires geographic independence as well.
What is Decentralization in Blockchain?
The simple definition of a decentralized blockchain network is a system where nodes known as validators (or miners) interconnect and work together to perpetuate the creation and storage of a blockchain.
In public blockchain networks, decentralization is pivotal to the correct functioning and long-term usability of the blockchain and its native crypto token.
Decentralization is at the core of the main promise of blockchain technology — the removal of trusted intermediaries in the handling of funds and data transactions.
Instead of centralized third parties such as banks, governments, and data storage providers, blockchains leverage their decentralized networks to provide security and functionality through cryptographic methods.
This is to ensure transactions remain private; there is no double-spending, no manipulation, and no censorship.
Centralized Network vs Decentralized
Decentralization architecture differs from the centralization system in several important ways as seen in fault tolerance, attack resistance, and collision resistance.
Xi, Z. (2020)
A centralized network differs massively from a decentralized one in a few key ways:
- Censorship: Decentralized networks often aim to combat censorship, while centralized ones might intentionally incorporate censorship into their design. For example, the Bitcoin network does not discriminate against who can buy and sell Bitcoin. However, Facebook could remove a user’s account at their discretion.
- Security: Decentralization is inherently more secure from attacks relying on network manipulation, corruption, and single points of failure. This is due to it being run by multiple independent participants rather than one entity.
- Speed and Efficiency: Decentralization often comes at a cost, as achieving network consensus requires a lot of processing power and time. In contrast, centralized networks can have a single authority that sends instructions to all network nodes. There is no need for nodes to independently verify them between each other.
- Data Integrity: On decentralized networks, nodes often share data and each one independently stores the complete set. Moreover, to change this data, a majority of the nodes need to agree on it first. This makes corrupting the data much more difficult in comparison to centralized networks, where the central authority can simply update the data at any point in time.
Final Thoughts
Decentralized networks provide an alternative to their centralized counterparts, improving security and censorship resistance. While not universally applicable, decentralized networks can serve as powerful alternatives to traditional network design models and integrate into various use cases.
Xi, Z. (2020). The comparison of decentralized and centralized structure of network communication in different application fields. In 2019 International Conference on Management Science and Industrial Economy (MSIE 2019).
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