The Meaning of Decentralization for Cryptocurrencies and the Blockchain Itself
In the modern physical world, identity is just a few documents and pictures. Such physical objects are used to represent a person and unique identify them. However, no matter how unique the social security number may be, or how carefully you keep it, identity theft is still a common occurrence. It will continue to be as long as your identity is in the control of organizations and not yourself.
In the modern world and the way it’s been set up, there’s no physical method of taking your identity in your own hands. However, you can do so digitally with the blockchain.
Decentralization on the Blockchain
The blockchain is considered by many to be a digital ledger that’s open to everyone in the entire world. Although that may sound like the best place for fraud and illegal dealings, it offers a great opportunity for anyone all over the world to handle their own information. All you need is an internet connection.
The blockchain allows anyone to use it and access information from it. However, unlike the real world where two copies of pretty much anything exists whenever a transaction occurs, the blockchain allows you something different. It can be completely one way, or accessible to everyone because of the structure of the blockchain.
The blockchain offers you the chance to create a decentralized identity (DID). It’s information that you control yourself and hold in a specific place in the blockchain. Although there’s currently no exact way of doing this, soon enough you will find the opportunity to access the blockchain in order to hold your private information. Security parameters are being constantly improved to make the blockchain the ideal place for such activities.
What Decentralization Means for Cryptocurrencies
Cryptocurrencies use the blockchain to carry out transactions. Often called the future of finance and transactions, cryptocurrencies haven’t taken hold of the world as they were supposed to. One of the major aspects influencing that happens to be the volatility that exists when it comes to cryptocurrencies. However, of the many solutions currently being proposed for that, decentralization seems to be the best one.
Decentralization allows cryptocurrencies to keep their transactions independent and wholly reliant on just a small number of people. Rather than having it extend to other cryptocurrencies and being affected by their losses and gains, a decentralized cryptocurrency allows people to invest in something that is influenced by their actions. In a way, a community is what controls and influences a decentralized cryptocurrency.
Such cryptocurrencies have already taken hold of the blockchain and are gaining popularity quickly. One cryptocurrency, LIC, even offers its own specific security measure that utilizes decentralization to keep track of transactions and dealings and keep its section of the blockchain safe to use for its customers, through a 100% POS system. This is just a start. Soon, the blockchain will return the influence over each aspect of your life to you.