What is Bitcoin Decentralization (What is Bitcoin’s Decentralization)

08/14/2023 16:08 • Daily Digest • 51 views

What is Bitcoin decentralization? Bitcoin has been considered a decentralized currency since its inception, as it can be controlled by one or more entities. As a result, there are many factors that make Bitcoin an effective form of currency and medium of exchange, providing support for all types of assets such as gold and real estate. However, this also causes certain functionalities on the Bitcoin network to become less user-friendly.

According to Mike Novogratz, the CEO of Decentraland, cryptographic technology provides “trustless” economic incentives to maintain its system operations. He states, “I believe a critical component of the Bitcoin protocol is the creator of open-source software development toolkits.”

Unlike Bitcoin, decentralization is not aimed to eliminate concerns about concentration of power, but to reduce the need for user privacy. Bitcoin’s blockchain allows for smart contract codes to be compiled in a completely anonymous manner while still maintaining immutability.

Furthermore, with the increase in network participants and more developers entering the field, Bitcoin has undergone significant changes – the governance structure of the Bitcoin ecosystem has fundamentally changed.

Recent events suggest that most people still rely on centralized exchanges or custodial services, which may hinder the development of more transactions and wider use cases. However, Bitcoin decentralization is not just a single application but a core part of the entire industry.

Essentially, Bitcoin is an open network platform designed to facilitate the free circulation, production, and sales of digital content on the Internet. For example, BitPay, a Bitcoin wallet app store, will no longer have ownership of Bitcoin accounts; Coinbase Pro will no longer have customer data storage and access permissions as no one can obtain all the information they want.

However, Bitcoin’s adoption rate is still higher than Ethereum and Litecoin.Translated by: BluemountainLabs Team

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What is Bitcoin Decentralization (What is Bitcoin’s Decentralization)

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