Does decentralization actually ensure privacy?

  1. No government interference: Since blockchain is not controlled by any central agency like the government or bank, it is not prone to meddling by the government. This makes it immune to issues like devaluation and hyperinflation, unlike fiat currencies.
  2. Immutability: Blockchain is an open-source technology, which means every single transaction made on it is public, and under the watchful eyes of miners all over the world who verify and validate transactions on the network. This makes the possibility of a fraudulent transaction very unlikely. This is quite possibly the biggest merit of blockchains.
  3. Faster and cheaper transactions: Since blockchain allows the transfer of currencies directly from one person to another, there is no need for a third party to get involved. This allows for instant transactions with no usage fees, which is a convincing incentive for most users.
  4. Digitalization: Unlike other forms of wealth, blockchain-based currencies can be stored and transferred online and don’t need to be stored in a physical location like gold, fiat currency, or other valuables. This permits easier, safer storage as well as a smoother transition to a digital lifestyle.
  1. Criminal activity: Since the system is decentralized, there is complete anonymity in transactions. This lack of user verification can lead to blockchain being used for illicit activities. However, this is also true for centralized currencies at times, albeit on a smaller level.
  2. Volatility: Values of blockchain currencies can fluctuate depending on events in the real world because of their decentralized nature. This can make companies and governments reluctant to adopt them, fearing a possible financial crisis.
  3. Higher implementation costs: Although blockchain is more economical for individual users, it implies a greater cost for corporations, which is another deterrent to mass adoption and application.
  4. Greater energy consumption: Mining cryptocurrencies requires a large amount of computational power and electricity input, making it highly energy-intensive, and consequently very bad for the environment.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
LetsKrypto

LetsKrypto

Your Crypto Companion! Learn more about Cryptocurrency and Buy, sell, trade and pay with cryptocurrency to anyone, anywhere, anytime! Go to letskrypto.com