Decentralization using blockchain
Decentralization is a core benefit and service provided by the blockchain technology. Blockchain by design is a perfect vehicle for providing a platform that does not need any intermediaries and can function with many different leaders chosen via consensus mechanisms. This model allows anyone to compete to become the decision-making authority. This competition is governed by a consensus mechanism and the most commonly used method is known as Proof of Work (PoW).
Decentralization is applied in varying degrees from semi-decentralized to fully decentralized depending on the requirements and circumstances. Decentralization can be viewed from a blockchain perspective as a mechanism that provides a way to remodel existing applications and paradigms or build new applications in order to give full control to users.
Information and communication technology (ICT) has conventionally been based on a centralized paradigm whereby database or application servers are under the control of a central authority, such as a system administrator. With bitcoin and the advent of the blockchain technology, this model has changed and now the technology that allows anyone to start a decentralized system (and operate it with no single point of failure or single trusted authority) is available. It can either be run autonomously or by requiring some human intervention depending on the type and model of governance used in the decentralized application running on the blockchain.
An upcoming diagram shows different types of system that currently exist, that is, central, distributed, and decentralized. This concept was first published in 1964 in a paper by Paul Baran on distributed communication networks in the context of communication networks.
Centralized systems are conventional (client--server) IT systems whereby there is a single authority that controls the system and is solely in-charge of all operations on the system. All users of a central system are dependent on a single source of service. Online service providers, such as eBay, Google, Amazon, Apple's App Store, and the majority of other providers, use this common model of delivering services. On the other hand, in a distributed system, the data and computation are spread across multiple nodes in the network. Sometimes, this term is confused with parallel computing. While there is an overlap in the definition, the main difference between both these systems is that in a parallel system, computation is performed by all nodes simultaneously in order to achieve a result, whereas in a distributed system, computation may not happen in parallel and data is only replicated on multiple nodes that users view as a single coherent system. Both of these models are used with variations in order to achieve failure tolerance and speed. In this model, there is still a central authority that has control over all nodes and governs processing. This means that the system is still centralized in nature.
Different types of network/system
The key difference between a decentralized system and distributed system is that in a distributed system, there still exists a central authority that governs the entire system, whereas in a decentralized system, no such authority exists. A decentralized system is a type of network whereby nodes are not dependent on a single master node; instead, control is distributed among many nodes. For example, this is analogous to a model where each department in an organization has its own database server that they are in charge of, thus taking away the power from the central server and distributing it to the sub-departments that manage their own databases.
A real innovation in the decentralized paradigm that has started this new era of decentralization applications is decentralized consensus, which was introduced with bitcoin. This enables a user to agree on something via a consensus algorithm without the need for a central trusted third party, intermediary, or service provider.