Centralized services like Facebook, Microsoft, and Yahoo keep all your eggs in one basket. This means that bad actors only need to attack one weak link to compromise all your data. And there are many ways to do it, including DDoS, Man-in-the-Middle, and credential stealing to name a few. Decentralized services keep your data safe and secure by distributing it across many redundant servers with cutting-edge cryptography that ensures your data is complete, immutable, and incorruptible. Of course, there are many degrees of decentralization. In this article, we explore the varieties of decentralization, their history and evolution, and the benefits each decentralized consensus algorithm has to offer your business, NGO, or non-profit.
Distributed Ledger Technologies (DLTs) exhibit considerable tradeoffs compared to fully decentralized public ledgers like Bitcoin and centralized services like Google. For example, centralized services are designed to process high throughput, low latency computations that scale to meet increased demand. We see this in the success of centralized services like Amazon AWS, which transformed the legacy model of in-house server setups to vastly more efficient, less expensive cloud computation services. Scalability and cost savings are possible with AWS because of their private, trusted setup and the coordinated communications of highly performant centralized servers.