Decentralization is defined as the process of redistributing or dispersing functions, powers, people or things away from a central location or authority. Allocating decision-making powers to more mechanisms of any given system allows for faster execution of functions and more localized cost. Decentralization makes sense in certain scenarios where traditionally centralized systems are inefficient, expensive or corrupt.
Examples of how decentralization through Bitcoin technology can benefit existing systems is most obvious in the financial world. Using credit cards or Paypal for online purchases comes with costs and inefficiencies that decentralized solutions such as Bitcoin can mitigate. The transaction fee for sending money with Bitcoin is extremely low, or zero – for any amount of value. Everyone has access to the Bitcoin network, and everyone using the network can transact directly with each other without the need for middlemen. The peer-to-peer nature of these electronic transactions in a secure decentralized network has wide ranging benefits in both business to consumer and business to business transactions.