Centralization and Decentralization: Easily Explained.
Today I was discussing with some coworkers about cryptocurrencies and its potential to revolutionize the way we live. To my surprise, although they have academic degrees, some of them do not know the meaning of the terms centralization and decentralization, which are fundamental in the discussions and the nature of the cryptocurrencies. For that reason I wrote this post, so that we have a clear understanding of this concepts.
Centralization
Is a tendency to concentrate decision-making authority, which is granted to a single person or an institution= lack of delegation. A centralized system concentrates power for only a few.Advantage:It is possible that decision makers are better trained than those who are at the lowest levels.
Disadvantage: Those who make decisions rarely have contact with the people and situations involved.
Decentralization
It is, on the contrary, the deconcentration of authority in decisions making.
Advantage: encourages the development of individuals outside of high hierarchical levels
Disadvantage: lack of uniformity when making decisions.
Both terms are extremes of how power and authority should be distributed, in my opinion the extremes have always ended up doing harm, I think the ideal would be a middle point where we allow a balance of both parties.