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Decentralization means giving power to many people instead of just one group. For example, with blockchain technology, there's no one person or group that controls everything. Instead, the network is looked after by many people who work together to keep it safe and reliable.

Decentralization is a spectrum

Though the determination of something being centralized versus decentralized is binary, the degree of decentralization is not. Decentralization is a spectrum, and the degree of decentralization can be measured by the number of nodes in the network. The more nodes in the network, the more decentralized it is.

This does not mean that a network with more nodes is more secure than a network with fewer nodes. In most decentralized networks nodes group together to form a "pool" of nodes that work together to secure the network. In this case, the number of pools in the network is a better measure of decentralization than the number of nodes.

Why it matters

Decentralized systems are typically more resilient, fault-tolerant, secure, and transparent than centralized systems. Because there is no single entity running and controlling the network, there is also no single point of failure. The network can continue to function to the standards that its users expect even if some nodes are compromised or go offline.

This makes it much more difficult for bad actors to manipulate or corrupt the system.

In addition, decentralization can enable greater innovation and collaboration. Because the network is open and accessible to anyone, it can be used to develop new applications and services that would not be possible in a centralized system.

What is blockchain

Blockchain is a type of decentralized distributed ledger technology that is used to maintain a secure and tamper-proof record of transactions. It consists of a chain of blocks, where each block contains a set of transactions that have been verified and added to the chain.

In a blockchain network, the ledger is maintained by a distributed network of nodes that work together to validate transactions and ensure the security of the network. Each node in the network has a copy of the ledger, and block producing nodes must agree on the contents of new blocks being added to the ledger.

One of the key features of blockchain technology is that it is immutable, meaning that once a transaction has been added to the ledger, it cannot be modified or deleted. This provides a high degree of transparency and accountability, as all transactions are recorded in a permanent and tamper-proof manner.

Blockchain technology has a wide range of potential applications, from financial services and supply chain management to voting and identity verification.