Decentralization means a great deal to those who religiously follow crypto and are interested in applying distributed ledger technology in everyday life. Or perhaps you are an anti-institutionalist who does not trust governments and central banks with your savings. No doubt, there is a huge number of people who are technologically aware who know of this technology that swears by the importance of decentralization.
Maybe the question should be re-phrased – do regular, everyday people really care about decentralization? This is a more fair and reasonable question. The vast majority of people around the world do not own any kind of cryptocurrency and an even smaller amount can give you an acceptable explanation of what decentralization, blockchain technology, and cryptocurrency are.
Given that there is so much ignorance when it comes to this topic, how can decentralized networks even matter to these people, why should they care?
A Filippino woman working a job in Dubai to earn money so that she can send it back to her family in the Philippines is not going to care at all about the importance of decentralized networks of cryptocurrencies. Rather, she cares about which service or channel can give her the quickest transfers, the smallest fees and the least amount of tax to move her money from Dubai to her mother’s bank account in Davao City.
So this begs the question again, should ordinary people care about decentralization? Below are some reasons why it is important and should matter to everyone, regardless of their level of knowledge on this topic.
Decentralization means that there is no centralized entity that can deny your transaction. When you attempt to transfer money on a centralized service such as a bank or an online payment system, such as Paypal, chances are you will face a litany of red-tape before you can proceed with your transaction. This is even truer when you try to send your money abroad since government regulation and taxes come into the picture. Even if you go through all of this, there is no guarantee that your transaction will go through at all. There are many points during the transaction where your money can get blocked, frozen or have your account suspended for any number of reasons.
A decentralized network, like the blockchain that cryptocurrencies run on, is permissionless, meaning a central entity that verifies your transactions does not exist. The only thing that makes sure your cryptocurrency reaches the intended recipient is a network of miners who are indifferent to what transactions you make. This means that you will be able to complete transactions with little to no red-tape. Simply send the crypto you own to another user’s public address and that is all that is needed, the network will do the rest, without blocking your transaction for any number of reasons.
Countless times in the past have government actions and decisions cause the valuation of a certain currency to dramatically decrease in value, to the point where it becomes virtually worthless. This was seen in recent times with the Venezuelan currency the Bolivar, due to government policy and actions, the bolivar suffered hyperinflation and for a time, the currency was almost worthless. This meant that the savings belonging to millions of Venezuelans vanished in a very short period of time. Another recent, less dramatic, but significant example of government policy leading to the devaluing of a currency can be seen in 2016 to the British pound shortly after the results of the Brexit referendum.
There are numerous factors that are within the control of the government that can dramatically affect the worth of a particular currency and by extension, your savings. This becomes very worrying and unpredictable for most people and is something that most people if given the choice, would avoid.
This is where decentralization can become the solution. Because the network of cryptocurrencies is independent and does not belong to any government body or nation, the government policy of any one country is unlikely to cause devastating effects to the value of any decentralized cryptocurrency. This means that crypto owners can have more confidence in the value of their cryptocurrency and be relatively sure that their hard-earned money will retain its value.
According to the World Bank, “some 1.7 billion adults around the world still do not have access to a bank account.” This is despite the fact that many of the aforementioned people have access to a smartphone and an internet connection. Far too much of the world is shut out from a proper institution or system that can handle their money for one reason or another.
Decentralization means neutrality, one person does not matter more than another, the network doesn’t care who you are, it is simply there to execute the protocol. This means that anyone who has been shut out by traditional banking institutions can, with relative ease, store, send and transfer their cryptocurrency. Unlike banks and online payment systems, you can create your crypto-wallet by submitting little to no information about yourself. This means that the entry bar for users is very low in comparison. Once a user is part of the network, they and send and store crypto as they choose, due to the neutrality of the network, which does not discriminate one user, transaction to another. You are simply one public address that is sending crypto to another public address. This aspect becomes very appealing to people who have been left out by banking institutions and opens up a whole new way that they can interact with money.
Decentralization in cryptocurrency is probably one of the most important and useful aspects that it provides to users, but as mentioned above, many people lack the proper information when it comes to this topic. The benefits that are provided by the decentralization of currency are vast and can benefit almost anyone. Most people who are made aware of what decentralization can do for them agree that it is a technology that should be further pursued and popularized. There is no question that people should care about the importance of decentralization.