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Over the past couple of years, the world community has made significant progress in the fintech sector. This can evidenced by the increased interest in the digital economy in the consumer sector, the frequent holding of conferences on this subject, as well as discussions on blockchain technology and cryptocurrencies at the G20 summit.
Today we will talk about the main essential part of the modern financial industry: decentralization. Why this word is popular nowadays? Literally, every second startup in the crypto-industry is decentralized. Nevertheless, is decentralization necessary and why did the biggest whales of the industry start talking about it just now? Let us try to understand this issue.
Let us set the clock back. Approximately 30 years. The age of the birth of the Internet.
On the one hand, there are many slogans that at last the time for the real democracy has come and freedom of action. On the other hand, there are still some people who afraid of the introduction of such technology and are skeptical about such "freedom", demanding to close the Internet for a short while to think how to regulate such an emerging technology.
As a result, both camps were right, but partially. Supporters of freedom have received conditional digital democracy, and adherents of total control regulate the Internet, blocking messengers and other web services.
After all, the Internet initially was, in fact, a decentralized society, not subject to the central body.
The reality was somewhat different. Yes, now people are "free" with the freedom of expression their thoughts on the Internet, but large companies still control the digital community by providing third parties (intentionally or not) with confidential information.
So what kind of innovation decentralization has brought? Moreover, why business is so fussy about the crypto-industry? First — finance.
Throughout its existence, the monetary system remained centralized. Necessarily, there was a certain body (today it is the Central Bank), which regulated the circulation of funds and ensured that the long-established system did not collapse overnight.
However, there were some prerequisites of this. Maybe unsuccessful, but still there were. Suffice it to recall the story of Josiah Warren, who at the Cincinnati Time Store sold goods not for money, but for the obligation to perform labor. There were dozens and other attempts to replace or at least introduce decentralization into the world of finance, but all of them also failed.
Perhaps the problem of failure was the human nature of such attempts. Then there was no Internet and there were no advanced technologies in order to automatize the whole process.
Today the society is again trying to change the rules of the game of the financial world by introducing cryptocurrencies and it seems that this time state bodies around the world are excited about such decentralization.
Then the story repeats itself again with the Internet. Some people shout that cryptocurrencies «bring real freedom from a corrupt system», while the others blame digital assets for money laundering and terrorism financing.
The use of decentralization does not stop only with finance. The society has not yet realized, but decentralization is fully capable of showing the true democracy that everyone has been talking about for a long time. For example, the use of blockchain in voting, in tracking the supply of goods, for storing information and much, much more.
Decentralization will save the digital side of humanity from such an ambiguous notion as "trust." There will no longer be a need to question the transparency of the process.
Unfortunately, decentralization like everything else that is based on mankind is not flawless. With the development of quantum computers, the risk of breaking into such systems is increasing. Nevertheless, the very existence of this kind of technology already relieves the community of technological stagnation, in which it has been around since 2010.
With the widespread emergence of decentralization, there will be those who try to curb this technology. In the long-term, the technological race will begin.
Even nowadays in many democratic countries are performing discussion about bringing decentralization in presidential elections, large banks transfer internal transaction systems to blockchain, and retailers are slowly but moving to the world of digital payments.
We are on the brink of the future, which we could see in computer games and fantasy movies. It is possible that in a decentralized world, corporations will be able to become on par with government forces, and may even surpass them, making a giant step towards the technological singularity.
Decentralization is what futurists dream about and what politicians are afraid of, but on one side, both sides are in solidarity: this technology is here to stay.
The main question is who will regulate decentralization at the world level: the system itself or the government?
Source: https://cryptofiction.net/post/why-does-this-world-need-decentralization
