If you are a Cryptocurrency enthusiast, it is normal for you to focus on decentralized technology or in this case on blockchain networks without a central administrator, but what does it really mean that something is decentralized?
As we have learned in other articles related to Cryptocurrencies or decentralization, its main engine of use is to avoid trust in third parties and to participate in decision-making or to keep the system afloat.
And it is that in a certain way without this decentralized characteristic it is very likely that the Cryptocurrencies or decentralized applications that we know today could never have been created, since this is a fundamental pillar for the proper functioning of a network not based on trust; And despite the fact that many know the concept of decentralization, we will explain this concept in a simple way and why it is so important in the Cryptocurrency ecosystem.
A decentralized blockchain network is very summarized and simple, a chain of blocks that does not have a central controller or administrator entity of said network, that is to say that there is no one, be it a person, government, company or group, that has the maximum power to make changes or control some aspect of the system. To better understand this technology and how it works we must review certain concepts.
First we must remember the concept of Blockchain, and that is that a chain of blocks is a computer technology that is used to keep a secure record of the information that flows in a system; more clearly, we can say that this resembles a kind of virtual ledger that is stored and shared among various users or network participants, and these are known as nodes, the nodes serve as data transmission bridges and they can create new data, but not alter the existing ones, which means that none of these participants can change the information already created and verified; The main objective of any chain of blocks is to facilitate the process of recording transactions and tracking assets in a business network in a secure manner, whether active can be digital or physical, and through this method it is possible to transmit information of securely without worrying that it might be tampered with.
It is called decentralized since in this case there is no central server or main node through which the information flow of said network or system is managed; In this type of network, each and every one of the nodes owns the total information contained in the system, in this way everyone controls the information and a secure network is maintained through consensus and cryptography.
As we already know, the main use given to this type of network is the creation of Crypto asset projects or virtual currencies, however, thanks to the development of these same networks, we can find multiple uses.
And it is that thanks to the development and inclusion of the programming languages that are immersed in these networks, a significant change was achieved in the Cryptocurrency ecosystem. This change allowed the creation of smart contracts that at the same time allowed the creation of decentralized applications, with this new development the range was opened to new uses of this technology.
It is perhaps the most common use given to decentralized blockchain networks, and it is that thanks to the fact that there is no controlling entity, this model is perfect for maintaining a multi-participant system where trust is not the main pillar but rather cryptography and consensus through the decentralization of information.
These projects were born with the arrival of the first properly created Cryptocurrency “Bitcoin”, its creator Satoshi Nakamoto created and developed this idea in order to create an interchangeable digital currency without the need for a central bank or central government to control the issuance and the direction of the currency, this is another of the reasons why they are ungoverned networks, and in a certain way we can see that Satoshi’s wish came true, today Bitcoin is a Cryptocurrency that is not controlled by any central entity and works as currency of exchange or store of value.
It is perhaps the most current or most recent use, and it is that for the moment there are few blockchain networks that have implemented and developed their system with their own powerful programming language; Thanks to these Cryptocurrency languages such as Ethereum, they have been able to create very interesting decentralized application projects that have so far given satisfactory results.
Basically, these decentralized applications are normal or common applications to the naked eye, but the truth is that although they work almost the same as the applications we have on our mobile, they work or run through a layer of some blockchain, this means that all the Information stored or handled in said application is distributed in different nodes in an encrypted manner, so it cannot be altered.
Within these applications we can find Crypto games such as Axie Infinity or Cryptokitties, as well as applications specialized in saving Crypto assets where you earn by saving Crypto assets, or even more elaborate ones such as decentralized exchanges for trading Cryptocurrencies.
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Of course, but in a certain way it goes against the principles of Cryptocurrencies, which is trust based on consensus.
Correct, not even the creator of a decentralized blockchain can make changes arbitrarily since any change in the network must be submitted to a vote by all the nodes, if it is shown that this principle is violated it automatically ceases to be a decentralized network.
The fantastic thing about this type of decentralized network is that it allows meritocracy in decision-making, for example, if the network needs to be improved, a selection process is carried out for people who can solve the problem and a vote is taken on who will be the responsible and the method they will use to repair or improve the network.