The Importance of Decentralization: How will future be shaped?
After the arrival of decentralized systems, centralization fell out of fashion. The entire world is trying to alter their systems according to that. Entrepreneurs and even SMBs have started to use that technology. Right now, blockchain technology started to conquer every area of life including finance as well. But why has that gained so many attention? Why is decentralization becoming more preffered? What kind of outcomes can we get from decentralized solutions?
What is Centralization and Decentralization?
Centralization is controlling the network, database, server with a single authority which can lead to major problems in case of any mistakes or undesired actions. Also, in centralized networks you can not provide a privacy since all the information/data you send is definitely crossing through the networks of this centralized authority.
Some of the main problems centralized networks are;
- Stable lifecycle: Centralized networks require third party integrations, engaged users and therefore, a bigger budget. No matter what they do, after a while, they face a bigger competition and a more steady growth. While centralized networks need stabile contributors and people, decentralized networks are expanding with the community helping them to grow.
- Trust issues: Centralized networks can be shut down some day and that could lead to disappointment in all customers and users. They can lose money, information and effort. Especially in case of banks, declaring bankrupt could lead to a high loss in the community which can result in not being able to get the money back they’ve lost.
- Data privacy: In centralized networks, personal or corporate data is being held in one server which can be used poorly or badly by others. Getting hacked could lead to distribution of personal data in everywhere.
- Single control: When a company gets shut down or declares bankrupt, there’s nothing an individual could do in order to save their money etc. This causes dependency on single authorities and requires a trust to that authority. However, everything can fail and single control can result with disasters.
Decentralization, on the other hand, protects individuals and companies from all these pains listed above. By being decentralized, individuals can easily access transparent information, contribute to the community and protect their data. Decentralized solutions could make sure that your money is safe on a platform, your artwork is protected for copyright issues and your files cannot be hacked.
One can easily hack a centralized system but right now, there is no way a decentralized network can be hacked.
In his article “Why Decentralization Matters”, Chris Dixon points out the main problems with centralized solutions and how decentralization could mostly solve these problems;
“Centralized systems often start out fully baked, but only get better at the rate at which employees at the sponsoring company improve them. Decentralized systems start out half-baked but, under the right conditions, grow exponentially as they attract new contributors.” — Chris Dixon
How will blockchain technology help building the future?
Blockchain could be used in many areas of daliy life;
- Finance // Banking: secure payments, lower fees, trusted network, fast and global transactions.
- Cybersecurity: increased security, easy to crowdfund, hard to destroy
- Insurance: smart contracts, multiple parties, transparenc of shared data
- Energy: cheaper peer-to-peer energy transfer, smart metering capabilities.
- Medical // Healthcare: easier drug and medical chain integration, secure patient information, automation within the doctor and the patient.
- Art // Media: secured ownership rights, easy purchase of digital art.
- Travel: trustworthy traveller information including IDs, passports, verified loyalty programs and tracking
- Cloud Storage: increased security, lower transaction cost, crowdsourcing unused space.
- Charity: tracking donation allocations, simpler donations, secure crowdfunding projects.
- Legal: smart contracts, easily accessible by related parties, secured network for documents, simply maintained deadlines.
A remarkable number of people are being affected by centralized networks in their daily lives and face serious problems that concerns their personal safety and essential data. This specifically affects finance industry a lot and high interest really disturb people but still, they’re using them since there are no other options.
Especially, in MENA region, most of the population are not using banks because of the reasons listed above and as we can easily understand, blockchain technology could easily alter these problems into innovative, secure, sustainable solutions.
As MenaPay, we’re aiming to solve the problems of MENA and want the community feel secure whilst making transactions by being blockchain based and 100% Islamic compliant. So that, in every aspect of life, community could easily make payments, crossborder transactions and not need to carry a lot of cash which will make them get rid off the fear of getting robbed and they will easily track all their payments and expenses via one platform.
For more information; join our Telegram community and find more about the first blockchain based payment gateway of MENA region;
