Decentralization

What is Decentralization?

Short answer:

Decentralization (in the crypto world) means there is no single entity that owns the majority of a computer network and/or its data.

Eg: Facebook is a centralized network, they own all of the data you create on their platform. Whereas Ethereum is a decentralized network, where users own the data they create.

Long answer:

We’re going to cut straight to an example…

YouTube (owned by Google) is hosted on a centralized network.

Here’s how it works right now:

- Google owns YouTube.

- They own and operate thousands of computer servers to store the billions of hours of video content and maintain the site.

- To make money, they sell ad space on the site.

- Content creators make videos for their viewers, who get to enjoy the content in exchange for watching ads.

- Any ad revenue generated is split 50/50 between Google and the content creator.

Here’s how a decentralized YouTube might work:

- No single entity owns [decentralized] YouTube.

- Thousands of independently owned and operated computer servers (spread around the world), store the billions of hours of video content and maintain the site.

- To pay the individuals running these servers, [decentralized] YouTube sells ad space on its site.

- Content creators make videos for their viewers, who get to enjoy the content AND get paid in exchange for watching ads.

- Any ad revenue generated is split 45/45 between the viewer and the content creator.

- The remaining 10% goes to the individual hosting and distributing the video from their server.

Pretty neat!