What is Decentralization#
Decentralization usually refers to the dispersal of power, control, and decision-making from centralized institutions or organizations. In terms of value, decentralization generally pursues equality, openness, and autonomy.
Let's consider the example of a ride-hailing platform. There is a group of passengers in need of transportation services, and there is a group of drivers willing to provide these services. In theory, these two groups can negotiate rules for matching and pricing, decide on evaluation and reward systems, and then execute according to the established rules and systems without the need for an intermediary platform. This way, the cost for passengers can be reduced, and the earnings for drivers can be increased.
Isn't it wonderful to think about?
Issues Brought by Decentralization#
Decentralization means that while individuals enjoy more rights, they also need to take on more responsibilities for the system. For example, for individuals, the risks of fraud and cyber attacks may increase, especially when it involves peer-to-peer interactions.
Taking the example above, because the centralized platform is removed, the responsible organization is also removed, and the security of drivers cannot be guaranteed in many ways. Therefore, individuals need to take on more responsibilities and risks.
If decentralization only increases freedom but reduces security and usability, then it may only result in a net negative value and may not be worthwhile. In many aspects of reality, absolute decentralization cannot solve every problem. On the contrary, gradually increasing the level of decentralization through multiple small steps is more practical and beneficial. It is necessary to find a balance between centralization and decentralization.
Conclusion#
Living in groups is our nature, and centralization is our nature. The development of decentralization and centralization complements each other. No matter how much decentralization grows and dominates the market, it is still just a part of the whole society. While decentralization is developing, centralization is also evolving and providing us with convenience. Ultimately, our society consists of both centralization and decentralization, and one cannot exist without the other.