Centralised vs Decentralised system

What is the centralised and decentralised system? Why is it a big deal?!

You must have heard of "Blockchain", and the chance is you are reading this because you probably got confused about blockchain's "decentralised" strength and why people make such a massive deal about it.

Blockchain is often used for crypto related project (digital currency). However, I find it essential to understand the general interpretation of the word "centralised" vs "decentralised" because blockchain technology is not all about finance.


Centralised system


Most of the things we use daily are centralised.
Your banks, social media (Facebook, Youtube, Instagram, TikTok, you name it), gadgets, and government could be centralised too.

The key is on 'trust'. If you have to trust another entity to confirm or verify your tasks, you are dealing with something centralised. A good example is when you want to send money to someone you have never met named "Elie". Based on the information Elie gave you, you rely on the bank to confirm that this account exists in their database. Therefore you feel safe hitting the "send" button.

Oh, on top of that, you also trust the bank to hold your money. Although you don't discern it, you are asking permission from your bank whenever you withdraw your money. Banks can refuse cash withdrawals and freeze your account as they see fit.

Let's give another example—your YouTube account. When you create it, you provide your identity and give YouTube permission so you can use their services, and they can have the right to publish your content.

When you upload a video, your content belongs on the YouTube database, managed by them. Their code is not open, you're not entitled to see the code or own your own data. They own the data. Your gain is that you unlock the potential of reaching billions of people with your content. You could make millions of dollars streaming your video. Still, they could also decide to ban your account, unpublish your content without your permission, or sell your data to whomever they see fit (yes, I am talking about ads).

The bottom line is that you ultimately have to trust that these companies are doing things correctly and in your interest.

Centralised system pros:

  • Focused vision
  • Energy efficient (at least for now)
  • Clear chain of command, faster decision making
  • Dedicated resources

Decentralised system


Is there anything decentralised these days? Yes, the Internet! The Internet is controlled by many. It consists of millions of devices linked together in an open network. No one can own, manage or switch it off for everyone.

Coincidence? No, this was very much a part of the design. The inventors of the Web want all people to be able to create and access information. I can't imagine how the world would be today if a company, country or wealthy individual owned the Internet.

Anyone, literally anyone, can create a new website. When one website is down, others won't be affected. This architecture enables the Web to scale, facilitate innovation, and open the market.

Don't get confused. Some successful services have achieved near-monopoly status, but the Internet is not them, and they are not The Internet.

Anything that doesn't require an entity to allow or disallow you to do what you want when you want can be considered a decentralised system.

Decentralised system pros:

  • Scaling is easier
  • Peer-to-peer means no one node has supremacy over other nodes
  • High availability since we're not dependant on one centralised node


A clear distinction between a centralised and decentralised system can be illustrated in a case where a user named "Ivana" posts to a centralised system called Facebook.

Facebook has one computer, and this one computer is responsible for verifying Ivana's updates. When confirmed, this one computer will update everywhere on the Facebook page where this new change is affecting.

On the alternative side, hundreds of thousands of computers verify Ivana's change in a decentralised system.

As a Web 3 enthusiast, I don't want everything to be decentralised. I believe the key is balance. What is the problem we are solving? What is the purpose of the project, and why?

Now we understand what centralised and decentralised are. How about reading more about Blockchain?