A decentralized economy is an economic structure that consists of a
network of various technical devices that permit traders to create a
marketplace without a centralized region.
In a decentralized market, the
technology provides users with access to low prices and make it viable for them
to deal directly with different traders without the influence of any middlemen.
In layman's language, you can say that a decentralize deconomy is one where transactions take place without any involvement of
middlemen like that of any financial entity or intermediaries.
For Instance: If someone keeps
valuable assets under their mattress, a robber can reduce that nest egg to zero
in a single night. If most of one’s assets are stored in a financial
institution, a failure within that institution can potentially wipe out
everything. This is not the same with blockchain powered cryptocurrency wallets
as they are encrypted at multi-levels to be secure and safe.
The
Advantages of a Decentralized economy
One of the most perceived benefits
of decentralized markets is the fact that it dramatically reduces the
possibility of hacking, compromising accounts or transactions as there is no
single data resource they can attempt to infiltrate.
Decentralized markets can allow for
transparency between parties, primarily if they use technology that ensures all
parties share mutually agreed data and information in the transaction.
A
Final Word
One of the blockchain’s most salient
features is decentralization. The blockchain is increasingly used to
decentralize the existing system. The inherent decentralization of the system
using the blockchain technology would address many institutional problems by
creating a fault-tolerant, widely-distributed repository for its assets that
eliminates any single point of failure.
In this new ‘decentralized financial system’ users will be able to access censorship resistant financial services while having full control of their wealth and personal data. These financial tools will be open, permissionless and would require an internet connection to access them rather than geography and circumstance.
Comments
Post a Comment