Decentralization and its criticism - arguments for and against

Not so long ago, it was clear to absolutely everyone that decentralization is essentially the key feature of the cryptocurrency. It is nothing more than support for the functioning of the network by a large number of simultaneously connected users (nodes), and not by a single central authority. Each such node has copies of data on all intra-network transactions, and in order to complete a transaction, 51% of nodes must recognize it as genuine. This is a simplified scheme of operation of the blockchain of decentralized finance or DeFi.

It would seem that the advantage of the new approach in comparison with the usual centralization is obvious - in this case, decisions are not made by a limited group that can act solely in its own interests and infringe on ordinary users. And since the cryptocurrency was originally created as an alternative to classical financial and banking systems, decentralization in its case looks more than logical. It is she who prevents any interference with the network, which makes cryptocurrencies so important and attractive to users, especially those who value privacy. But is there a fly in the ointment in this barrel of honey? Definitely.

And the main argument of the opponents of decentralization is security. Yes, with decentralization, your funds are reliably protected from unscrupulous or biased creators of the network itself, but the risks of hacking wallets by hackers still remain. Millions of computers around the world are involved in conducting operations, and each of them is a potential target of fraudsters to gain access to other people's funds. It is impossible to provide equal full-fledged protection for all network participants, and in case of theft it is much more difficult to track the "hotbed" of hacking and information leakage. Moreover, there is simply no single body that is responsible in case of loss of funds, so in fact there will be no one to ask you.

Another risk is the banal inattention of one's own. If you accidentally sent funds to the wrong wallet, then due to the peculiarities of the functioning of the system, you simply will not be able to suspend or cancel the transaction and return the mistakenly transferred money. The same risks apply to the loss of access to the wallet.

The absence of legislative regulation as such is also often mentioned by opponents of decentralization. The lack of a clear legal status not only prevents the active introduction of cryptocurrencies into the business environment and large projects, including state ones, but also again prevents the fight against fraudsters and reimbursing users for losses from their actions.

Thus, decentralization definitely has both significant problems, which its opponents are actively talking about, and a great potential for development. Many experts agree that if it is abandoned, cryptocurrencies themselves will lose their original meaning, and the system needs qualitative improvements, and not in any way in liquidation and total control. Time will tell which of the two opposing camps will win, or they will find a compromise.

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