A concept has been making a noise and promising to revolutionize how we transact, interact, and secure information. This is what we call a decentralized blockchain network. This complex term has been used in numerous sectors and industries.
Is there something important about this blockchain? In this guide, you will break down its complexity into easy-to-understand concepts. This article will walk you through a blockchain network’s potential and reveal its power.
What is a Decentralized Blockchain Network?
The distribution of functions, control, and information instead of centralizing them into a single entity is called decentralization. Decentralization is a system where information flows into multiple paths. It allows data to be spread among several network nodes at various locations.
The internet is an ultimate example of this decentralized blockchain network. ARPANET, its predecessor, was designed to survive a nuclear attack. It was built in 1969 for the U.S. Defense Department. In ARPANET, traffic would be diverted to the other parts of the network if one part went down.
This operation of this concept has remained until this day, making the internet impossible to take down. In this section, you will learn the advantages of decentralization and how it will help the betterment of the future.
The Advantage Of Decentralization
There are many advantages of decentralization. Here are some:
- Fidelity Of Data
One of the advantages of a decentralized blockchain network is its ability to maintain the fidelity of data. Its enhanced security makes it resilient and secure against attacks. Decentralized networks distribute data across multiple nodes. So, within the network, no single node can alter the information it holds.
- Transparency
The decentralized network promotes transparency. All bits of information on the blockchain are open to everyone. Once this information has been recorded, altering or deleting it from the database is impossible. This can happen because each node has its copy of the chain. When new blocks are confirmed and added, these chains get updated.
- Data Accuracy
In a decentralized blockchain, integrity can be ensured as data can’t be siloed and copied from one ledger to another. Businesses frequently archive their data. Thus, it has to be reconciled. And every time this happens, there is a huge possibility for data loss or invalid entry.
- Full Control
In a decentralized blockchain, all the members and users fully control their information. They can also control who can see and access it.
- Security
Decentralized blockchain is more secure than centralized since decentralized blockchain employs encryption to protect data. They use either public key or asymmetric encryption.
Why Are Blockchains Decentralized
Decentralized blockchains keep the control out of someone’s hands. They are designed to be inalterable. So, once the data has entered the chain, it becomes irreversible. You can add new data to the chain but not change or edit the older ones.
What Are The Types Of Decentralized Blockchain
There are different types of decentralized blockchains. It often demonstrates one of the levels listed below.
- Fully Centralized
A fully centralized blockchain is controlled entirely by a single central entity. This type is more prone to hacks and data leaks.
- Semi-decentralized
Managed and controlled by multiple authorities, semi-decentralized is another type of blockchain decentralization. It is a combination of centralized and decentralized blockchain systems.
- Fully decentralized
In a fully decentralized blockchain, no central authorities manage or control the network. This type of blockchain is less prone to hacks and data leaks as there is no single point of failure.
Subcategories Of Decentralization
There are different subcategories of decentralization. They categorize the functions of decentralization based on its use cases. These are as follows:
- Physical decentralization
In physical decentralization, the blockchain servers are dispersed across the globe. This way, the loss of physical servers won’t harm the network. It is because no single party owns it.
- Transactional decentralization
This category of decentralization is used to improve the transparency and efficiency of business-to-business or B2B networks. It provides a secure, consensus-based environment for recording, verifying, and executing transactions. This is through the use of inalterable ledgers and smart contracts.
- Political decentralization
The concern of political decentralization focuses more on how many people or organizations control the system, not the number of servers. If the control of the network is on a few people or organizations, the less decentralized it is.
Applications Of Decentralized Blockchains
The application of blockchain technology goes beyond cryptocurrencies. As a matter of fact, blockchain technology has been used in various industries in various ways. Below are the different applications of blockchain technology.
- Smart Contracts
Smart contracts are one of the applications of blockchain. They are contracts that execute the terms of agreements into code. Smart contracts eliminate the need for intermediaries and automate the processes. In this way, they can reduce costs and enhance the efficiency in financial and legal transactions.
- Voting Systems
Voting systems can be more secure and transparent with the help of blockchain technology. It ensures the integrity of the elections as votes are recorded securely. Anonymity is also ensured with this technology.
- Supply Chain
In terms of supply chain, blockchain technology ensures the tracking of the origin and journey of the products. Authenticity and quality of the products can be ensured, which is crucial in pharmaceutical and food products.
- Healthcare
In blockchain technology, medical records can be securely stored. This ensures portable access for patients and healthcare providers.
- Digital Identity
Blockchain enhances security online and reduces the risk of identity theft. It is because it offers a more secure way to manage and verify digital identities.
- Real Estate
Blockchain technology minimizes the risk of fraud in property transactions. It simplifies and secures real estate deals.
- Energy Trading
It allows individuals to buy and sell directly to one another. This technology enables peer-to-peer trading of renewable energy.
Example Of Decentralized Blockchain Network
WEMIX is an example of a revolutionary blockchain with a borderless mega-ecosystem that will empower the future of everything. It offers a decentralized blockchain network driven by platforms, which focuses on delivering experience-based services. It is high-performance and designed to be a robust, efficient, platform-driven, service-oriented public blockchain.
The Future With Blockchain Technology
In developing new technology and applications, a decentralized blockchain network has a lot of potential. If you understand how this blockchain works, you could realize this potential sooner than expected.
Decentralized blockchain networks have become an essential part of different industries. How you handle data, transactions, and digital assets is important. With this technology, you can collectively unlock a more secure, transparent, and efficient life to shape a better future.