Introduction to Decentralization

What is Decentralization?

Decentralized networks are made up of computers, also known as nodes, that interact on a direct, peer-to-peer basis without the need for third parties. Within a decentralized network, information is distributed to every single “node” on the network. Each node has an updated copy of the recorded data. Decentralized networks can also distribute data in such a way that information can be validated without that information being transferred to a third party by reaching an agreement among nodes. Data is validated by using an agreed-upon consensus mechanism, which often involves the other computers on the network checking the validity of the data before it becomes permanently imprinted onto a blockchain.

In a decentralized network, each participating node is independent of the others. Rather than following the instructions of a central authority, decentralized nodes connect using common rules, but maintain their sovereignty and manage their own privacy. This helps keep the network secure, while also ensuring relatively democratic governance.

Centralization Network

Source: Blockchain Institute

Decentralization Network

Source: Blockchain Institute

A consensus mechanism is a way for nodes to come to an agreement about the integrity of data before it becomes part of a blockchain. Once the block contains this data, it is distributed amongst nodes, making it near impossible to change data that has already been recorded to the ledger. Instead of changing data in one centralized database, to change the data on a decentralized network (blockchain), a majority of nodes would have to be updated to reflect fraudulent information within a short amount of time. Otherwise, such information will be rejected by validating nodes.

Decentralized Storage

Decentralized Storage offers compelling features for the health & future of the internet! Along with increased resilience from censorship, peer-to-peer protocols become faster as the number of users grows. Conversely, a bottleneck is often created with centralized servers as more users are added.

Decentralisation is understood as the transfer of authority from a central entity to a more localised and ‘liberal’ system. The concept itself has been around for awhile and an earlier concept could be paralleled to the introduction of the Internet where the spread of information was democratised. The term is now being coined against Blockchain technologies and applications such as Bitcoin and Ethereum which decentralise financial transactions and computing power.

Storage is defined as the retention of retrievable data on a computer or other electronic system. We use storage on a daily basis from the mobile phone and computers we use and it is easily understood from the files we put onto a USB stick. From the days of having to put files on a floppy disk to being able to place files in the ‘cloud’, storage has come a long way.

Decentralised storage is a potential solution that Blockchain companies are researching and implementing. It is a system of being able to store your files without having to reply on large, centralized silos of data that don’t undermine important values such as privacy and freedom of your information.

Back in the day of P2P file sharing, torrenting and services such as Limewire were popular in downloading music and video files. It worked as a system where many users maintain copies of the file and seed (send fragments of the file) to participants on the network. However there were no mass-scale consumer [1] incentive mechanisms for the network participants to stay online. Decentralised storage networks operate in a similar manner with further advanced cryptography and encryption as well as the added incentive mechanism.

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