Decentralization Vs Centralization: Advantages, Usage, and Security

Decentralization Vs Centralization: Advantages, Usage, and Security

The debate between centralization and decentralization in cryptocurrency is still furious among the public. To better understand these two, we need to consider Bitcoin’s implementation. To store its blockchain, Bitcoin needs a collection of computers. This blockchain is a specific type of database storing every Bitcoin transaction made ever. In this case, all these computers are not under one roof. Each computer or a group of computers is managed by unique individuals or groups of individuals. Hence, Bitcoin’s Blockchain uses decentralization.

I definitely personally hope centralized exchanges burn in hell as much as possible

Vitalik Buterin, Ethereum Founder

As the Ethereum Founder stated his dislike for the centralized digital assets, the crypto world’s perspective changed over time. It shows that centralized exchanges have the ability to limit the number of coins and control their distribution processes. The idea of centralization refers to the use of a third party to help conduct transactions. This is common in a bank setup where a customer trusts the bank to hold the money.

Centralization and Decentralization Features

Decentralization Vs Centralization | Live Crypto
  • Used to conduct trades from fiat to cryptocurrency or vice versa
  • Needs a third party or a middle man to complete the trade
  • Bounded network
  • Server failure could lead to access denial
  • Centralized Organizations have access to your entire financial activities
  • Can be Hacked
  • An alternative way to centralized method to conduct the trades
  • Cuts out the middle man generating a “trustless” environment
  • Peer-to-Peer network
  • Borderless and Reliable
  • Decentralization is based on private keys and hence nobody other than you has the access to your funds
  • Secured

Overall, decentralization easily takes over the centralization by all means. Decentralization transactions are quick, cheap, and transparent which everyone can see and without any central point of failure.


In the case of decentralization, it is almost impossible to hack since hackers need to take control of every node. This also means that the blockchain is the safest and secure way to send/receive funds anywhere in the world. Whereas, centralized systems can be hacked and manipulated.

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Abhay Naik

Tech Enthusiast | Cryptos & Stocks Trading


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