What is Decentralization?

Every blockchain protocol, decentralized Application (dApp), Decentralized Autonomous Organization (DAO), or other blockchain-related solution adopts varying levels of decentralization. The adoption level is typically based on the maturity of the solution, the time-proven reliability of its incentive models and consensus mechanisms, and the ability of the founding team to strike the right balance. For example, many DAOs have various components at different stages of decentralization: oracles (i.e., third-party services that provide smart contracts with external information) may be partly decentralized, smart contracts might be fully centralized, while the governance process for adjusting parameters is community-driven and decentralized.

On a broader scale, decentralized blockchain solutions are being explored and adopted by organizations of every type, size, and industry. Some notable examples include applications that provide immediate foreign or emergency aid to those who need it most, without the mediation of a bank, government or third-party entity. Or applications that give people the ability to manage their own digital identities and data. Today, social media platforms, companies, and other organizations sell this information without the individual seeing any benefit. A decentralized approach would help make it equitable for all.