When discussing blockchain and cryptocurrency, the phrase decentralized network is frequently used. However, many individuals are still unsure what a decentralized network is and how it differs from centralized and distributed networks. A decentralized network is one in which several authorities serve as a centralized hub for network participants. A decentralized network design in computing spreads tasks across several devices rather than depending on a single central server. Each of these individual devices functions as a tiny central unit that communicates with other nodes separately. As a consequence, even if one of the master nodes fails or is compromised, the remaining servers may continue to provide data access to users, and the total network can run with little or no disturbance.
Difference Between Centralized Decentralized Networks
The majority of the IT world still uses a centralized network. This was achieved at the start of modern information technology by employing a server, a computer intended to perform numerous computing activities at once. They were frequently stuffed into an office closet that housed data storage and was linked to another workplace PCs.
The Internet began the transition away from the office server. Larger, more powerful servers filled with data and advanced applications might be stored in a centralized data center and accessed through the Internet. As a result, enormous and centralized cloud computing companies like Amazon’s AWS, Microsoft’s Azure, and Alphabet’s Google Cloud emerged.
The internet, cloud computing, and even private data centers run by individual enterprises, on the other hand, remain extremely centralized. They rely on only a few massive data centers to run. Edge computing networks and the Internet of Things (IoT) have begun to decentralize IT by extending the reach of the cloud. The goal of edge networking is to establish additional data centers that are closer to the user. The networks can be geographically networked, and data and services are frequently spread across numerous data centers.
Blockchain expands on this notion. Individual computers, including those not controlled by a single organization, can take part in the computing and management processes. Because the blockchain includes all of this information and distributes it to each miner, data storage is completely dispersed away from a data center.
Financial incentives are also distributed and decentralized. Some cryptocurrencies function as tokens, allowing owners to stake their holdings and share revenue earned by blockchain administration. The money is created by charging customers who use the blockchain network to power their digital services transaction fees (known as gas costs on the Ethereum network).
Here are several strategies for preserving a decentralized network’s security:
- Use robust encryption. On a decentralized network, every piece of data ought to be securely secured with powerful algorithms. Attackers will find it far more challenging to access and steal data as a result.
- Put access restrictions in place. The network should only be accessible to authorized users. Passwords, two-factor authentication, and other techniques can be used for this.
- Observe any unusual activities on the network. Decentralized networks need to be continuously watched for any indications of harmful behavior. To do this, security techniques like intrusion detection and prevention systems (IDS and IPS) can be used.
- Maintain software updates. In order to safeguard the network from known vulnerabilities, software upgrades frequently contain security patches. Software updates should be installed as soon as they become available.
- Inform users about security. Users should be made aware of security best practices, such as the use of strong passwords and being cautious when sharing personal information online.
You may aid in protecting the security of your decentralized network by adhering to these security best practices.
For preserving the security of a decentralized network, consider the following extra advice:
- Employ a trustworthy network provider. Make sure to do your homework and pick a network provider with a strong reputation for security when making your selection.
- Ensure that your network is current. It’s critical to keep your decentralized network updated with the most recent security patches and upgrades since decentralized networks are always changing.
- Employ a firewall. Your network may be protected against illegal access with the use of a firewall.
- Utilize IDS/IPS (intrusion detection and prevention systems). Systems like IDS and IPS can assist in identifying and stopping harmful activity on your network.
- Maintain frequent data backups. You’ll need a backup to restore your data if your network is attacked and your data is compromised.
- Inform your staff about security. Your staff should be knowledgeable about the security dangers posed by decentralized networks and how to take preventative measures.
The benefits and drawbacks of decentralized networks
There are drawbacks to decentralizing a network, although dispersing computers and data storage has several advantages over more traditional IT architecture.
Advantages of decentralized networks
- There is no one point of failure. Because information and computer requests are processed by multiple devices, a failure in one component of the network may not result in a system-wide outage.
- Faster performance: Because more devices handle requests in a localized computing environment, computation time may be reduced.
- Decentralizing and dispersing a network can make it more robust to intrusions and help safeguard data from loss.
The disadvantages of decentralized networks
- More expensive to run: Operating a decentralized network adds extra expenditures (e.g., increased power usage) and might require more time to update and maintain.
- Coordinating activities or approving changes becomes more difficult when a network and its participants are decentralized. In the case of blockchain, all stakeholders must vote on network upgrades, which might lengthen the time it takes to implement improvements.
- Because decentralized networks are distributed, the user experience may be less straightforward or streamlined than in a centralized network administered by a single body.
Who is Developing blockchain apps that make use of decentralization?
Every blockchain protocol, a decentralized application (dApp), decentralized autonomous organization (DAO), and other blockchain-related solution implements variable degrees of decentralization. The adoption level is often determined by the solution’s maturity, the time-proven dependability of its incentive models and consensus processes, and the founding team’s ability to strike the correct balance. Many DAOs, for example, have various components at various stages of decentralization: oracles (third-party services that provide smart contracts with external information) may be partially decentralized, smart contracts may be fully centralized, and the governance process for adjusting parameters may be community-driven and decentralized.
Decentralized blockchain solutions are being investigated and utilized on a larger scale by companies of all sizes and industries. Applications that offer quick international or emergency relief to people in need without the involvement of a bank, government, or third-party agency are significant examples. Or software that lets users control their own digital identities and data. Today, social media platforms, businesses, and other groups sell this information with no profit to the user. A decentralized approach would help make it more egalitarian for everyone.