Can decentralisation exist without blockchain?
- Crypto In A Nutshell
- Nov 1, 2020
- 1 min read
"The blockchain is trustless; therefore, it would be challenging to have a genuinely trustless system without the blockchain. All other solutions require the management and approval of a trusted party, and this inherently would make them centralised."
Firstly, decentralised governance is not a necessary feature of blockchain; it needs to be enacted. Since more businesses research on or establish based on blockchain, this distinction becomes increasingly important. There are many expected benefits from decentralisation, and those benefits may elude us if decentralisation fails in reality.
Most financial and governmental systems, which exists currently, are centralised, which means that there is a single highest authority in charge of managing them, such as a central bank or state apparatus. There are some crucial disadvantages to this approach, originating from the fact that any central authority also plays the role of a single point of failure in the system: any malfunction at the top of the hierarchy, whether unintentional or on purpose, unavoidably harms the entire system.
Bitcoin was created as a decentralised alternative to government money; therefore, it did not have any error, which helps it become resilient, efficient and democratic. The Blockchain, which is its underlying technology is what allows for this decentralisation because it offers every single user an opportunity to become one of the network's many payment processors. Due to Bitcoin's appearance, many other cryptocurrencies or altcoins have appeared, and most of the times they also use the Blockchain in order to achieve some degree of decentralisation.
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