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» » Centralized vs Decentralized: Real-World Cases

Payments System

Bitcoin is the first decentralized cryptocurrency. It is one of a kind since every single bank in the world uses a centralized system. This also means that they have access in your financial activities.

They know all your transactions like how much you paid, where you spend your money, to whom you send your money and everything else that is happening in your bank account. The worst case that would happen is when someone hacked the bank’s centralized servers, hackers would have access in all your information. If the centralized servers failed, then you cannot have access to your funds.

In comparison with a decentralized system, decentralized payment solves all the said issues. Using a cryptocurrency to send or receive payments does not need a third party to confirm the transaction. For this reason, Bitcoin and other cryptocurrencies are called “peer-to-peer digital currencies”.

Since third parties are not required, the fees become less and, in some cases, it is free. Cryptocurrencies are considered best in sending or receiving payment from someone overseas because money transfer companies like Western Union charge higher. Decentralized systems are borderless that makes it no difference in sending money anywhere whether it is locally or abroad. It has the same amount of time and fees.

Funds are also more secured in decentralized systems. It is only you who have access to your funds because the private keys were known only by you. Nobody can find out your private keys if you follow the correct safety measures.

The overall advantage of decentralized system in terms of payment systems are:

·         No third party access of your information

·         Cheap transactions internationally

·         Fast transactions internationally

·         Secured

·         No central point of failure

·         Transparent- transactions made on the network can be seen by everyone


Internet of Things (IOT)

Internet of things or IOT is used to describe devices that are connected to the internet. In the past, only desktop computers could connect to the World Wide Web, next is laptops then mobile phones. Nowadays, there are so called smart devices such as cars, washing machines, TV, lighting, and others that can be connected to the internet using wifi.

These examples currently exist in centralized systems. Driverless cars, for example, connect to the internet and can take you to your destination without you doing anything. This data was controlled by a centralized system. If this system was hacked or failed, the data being sent to the car could be corrupted and can cause accidents.

In addition to that, a centralized company that manages the data has also access to your information. They know all your whereabouts being done using the system. This is a lot of private information that the centralized system has about you.

Decentralization can be applied in every system that uses the internet like broadband, the GPS, and the telecommunication.

The summary of decentralization of IOT is listed below:

·         No chance of failing system

·         Hackers can access the data

·         User data would be secured and kept private

·         Anonymity, only the individual can have access to the information using the private key.


The energy system that is centralized is everything except being fair. A private, centralized organization acts as a middleman between the people and the national grid. The national grid connects the people’s houses to the electric supply using infrastructures.

These centralized third parties regulate the charges to people. They can make huge profits through this. PowerLedger is one solution that is currently being built which is a decentralized electricity organization.

Using a blockchain technology, the system will eliminate the middleman. The process will be like this:

a)    Install a solar panel in the house and use the electricity you need.

b)    There will be excess electricity that can be sold.

c)    Normally, it should be sold back to the electricity company, but with the use of PowerLedger, you can sell it to someone else directly at a fair market price.

d)    The electricity readings are posted to the public blockchain. Anyone in the local area can buy the excess electricity from you.

e)    You and the buyer can have a better price.

As from the above example process, the middleman is being eliminated. Both the buyer and seller got a better deal for their electricity. Nobody can cheat in the system and they can also use cryptocurrency trading, which is fast, secured, and free.

Below are the advantages of decentralized system in energy transmission:

·         Fair market price for both the seller and the buyer

·         Buyer pays in cryptocurrency (faster and cheaper that traditional payment methods

·         Third party is not needed

Government Voting

Majority of the countries' governments were elected by their citizens in a regular election process. This should be simple; everyone is equally allowed to have one vote and it is carried out in a just and transparent process.

However, the process does not always become fair. There were a lot of media reports and conspiracies after that claiming the election has been manipulated. There were investigations on this claim, but the public cannot access the voting data. There is no way for the people to know if it is true or not. There are also times where governments have won the election by manipulating the votes.

The solution for these threats is voting on a decentralized system. There will be transparency in the system, allowing all voters to view where the votes are coming from and the legitimacy of each vote. It will guarantee that everyone only gets one vote and there is no way the voting is being manipulated.

One cryptocurrency called Votecoin was created that will allow people to vote on a safe, secured, and anonymous platform. This will ensure that the result is fair and transparent.

Here are the advantages of a decentralized voting system:

·         Zero chance of election manipulation due to transparency of the network

·         No possible threats from government forces because of being anonymous voter

I hope that through these real-life examples mentioned above, you familiarized more on the decentralized system that cryptocurrency trading is being used. The blockchain technology is not only mattered to the cryptocurrency world but also to other industries.




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