Decentralization is a key characteristic of many cryptocurrencies, including Bitcoin and Ethereum. It refers to the fact that these networks are not controlled by any single entity, such as a government or financial institution.
In a decentralized cryptocurrency system, transactions are recorded on a public, distributed ledger called the blockchain. The blockchain is maintained by a network of computers, called “nodes,” that work together to validate and record transactions. Because the blockchain is decentralized and is not controlled by any single entity, it is resistant to censorship and fraud.
Decentralization has several advantages. It allows users to have more control over their own assets and can make it easier to transfer funds without the need for intermediaries. It also makes the network more resistant to attacks and outages, because it is not dependent on any single point of failure. However, decentralization can also make it more difficult to implement changes to the network, because there is no central authority to make decisions on behalf of the users.