Why is Decentralization Vital for Our Societies?

Why is Decentralization Vital for Our Societies?

Decentralization is vital for societal progress, empowering people, and promoting transparency across industries. Check why is decentralization vital for our...

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When we hear the word “decentralization”, many of us like to think about blockchain technology or cryptocurrencies such as bitcoin. Allow me to dig a little deeper to convey why decentralization is vital for our societies. Let’s first understand what centralization is and see if we really need an alternative.


Centralization, essentially, is about concentrating the decision-making process in one place or centrally. Centralization provides the overarching power of institutions to very few people at the top. Banks and corporate organizations are examples of centralized organizations. They handle a large amount of your data but you don’t have much say in how they use that data. Although Web 1.0 (static internet) and Web 2.0 (interactive internet) intended to help the public reclaim the power that truly belongs to them, they failed miserably. Instead, they recklessly took advantage of huge swathes of data and abused it to a great degree.

If such institutions were functioning atop open-source and transparent architectures, we could have democratized financial prosperity better and sooner. Imagine a future where users could decide to what extent their personal information is revealed to third parties. Envision a future where content creators operate as independent businesses, driven by the free market rather than intermediaries. Well, that time is on its way.

So, the question here is not whether we need an alternative? Instead, the question has to be, to what extent, should decentralization coexist with centralization in our societies. You must know, though, I am not here to promote either of them. I am here to promote a sensible approach to solve the inequality we see in this world. If that requires both of them to be installed at optimal levels in various industries, let’s not wait any longer. By the way, those are some very noble intentions, but intention is one thing and execution is another game totally.

Make no mistake, Web 1.0 and 2.0 transformed the lives of millions of people for good. To be fair, centralization did help China to raise over 500 million people out of poverty in a matter of 2 decades. But at the same time people have a fair idea at what cost such transformations came about across all the world. Further, coming out of poverty should not be in any way considered a reasonable benchmark for the quality of life we all deserve. And keep in mind, we still have about 600 million people around the world living under the poverty line. This is where the application of decentralization can be used in varying degrees top down across our communities. Decentralized systems like permissionless blockchains are here for our perusal.

Decentralization — A Much Needed Alternative to Centralization

Decentralizing systems have several advantages. For instance, it ensures data is distributed across multiple unrelated networks/people around the world. This greatly helps in preventing manipulations and collusions by bad actors and avoid another financial crisis like the one we saw in 2008 as much as possible.

Let’s take the example of a highly decentralized network like Bitcoin for example (let’s forget about bitcoin, the crypto, for a moment here). It uses a permissionless (or open-source) blockchain technology — where transactions are distributed across multiple nodes and recorded on digital ledgers by independent node operators (or miners in this case). Imagine someone wants to target an individual node or group of node operators handling a certain transaction to tamper the data. In order for them to be successful in their pursuits, they need to take over more than 50% of the network’s control, which is highly unlikely. Decentralization in general increases not just the transparency but also an individual’s security and privacy.

Contribute Towards Decentralizing Our Communities

I wouldn’t necessarily say we have a choice to make. As illustrated already, we need to roll up our sleeves to incorporate a very high level of decentralization across communities and institutions. The choice is here. We can be conscious about giving away control of our data to third parties and do nothing about it. Or we could actively recognize and contribute to the growth and power of peer-to-peer decentralized networks to a point where someday in the future anyone from anywhere — be it in a democracy or an autocracy — are empowered to be their own banks.

Projects like ‘SAFE Network’, for instance, are an integral part of this conversation. They need more recognition and outreach to develop their decentralized form of data storage and communications that respects our privacy while allowing us to keep our data under our control.

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Opinions expressed in this publication are those of the author(s). They do not necessarily purport to reflect the opinions or views of Shardeum foundation.

About the Author : Uday Prajapati graduated from high school in 2021 and will begin his college education in medicine soon. He actively creates content, organizes virtual events, and collaborates with other like minded people on cryptocurrency and blockchain technology. You can follow him on his Instagram account.

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