Centralized and Decentralized: Breaking Down the Difference

An easy way to remember the difference between Centralized and Decentralized is to break these down into simpler terms. Centralized meaning, targeted or concentrated and decentralized meaning spread out. Let’s take a closer look.

A decentralized platform (also referred to as DeFi), means it is not controlled by a single entity. Control is spread out and reliant upon a network of computers to verify and record the transactions. Defi is the crux of web3 as it is not necessarily controlled or influenced by any central authority, such as a bank or the federal reserve. 

A centralized platform is controlled by a single entity. This entity has the power to make decisions and has total control over their operations. These platforms are more vulnerable to censorship, interference and control along with being subject to government oversight. That’s not necessarily a bad thing! 

Choosing what type of platform to use depends upon your web3 experience level and the level of convenience you are looking for. Always do your research before participating.