Before bitcoin, blockchain, or cryptocurrency could even be a reality, the internet needed to exist in a reliable and decentralized manner. The internet was primarily invented as a tool for researchers and governments to share information digitally. Over time, protocols such as HTTP for web browsing and SMTP for email emerged, making the internet accessible to everyone.

Centralized vs. Distributed Systems

The internet was designed as a distributed technology. Rather than a centralized structure, early internet architects wanted a more resilient system. If one part of the internet were attacked, they wanted it to still be able to operate.

On a bike wheel, many spokes connect to several sides of a hub (the axle). This design facilitates a distributed approach — no one spoke could break down the wheel as a whole1. Distributed means no single point can bring down a system, such as a network of computers. This is the basis of the early design of the internet.

It is true today that internet companies such as Google, Facebook, and Amazon dominate the internet2. The distributed nature of the internet as designed decades ago has faded somewhat. However, blockchain technology may be able to change that trend in the future, a topic explored in later chapters.

Distributed vs. Decentralized Systems

The concept of distributed systems is a field of study within computer science. It is a design whereby computer processing is not done solely on one computer. Rather, in a distributed system computation is shared across a number of resources. These systems communicate with one another using some form of messaging, which differs depending on design.

A distributed system has characteristics of decentralization in that the failure of one single entity does not mean failure of the whole network. These systems have a common goal, such as using processing power to collectively accomplish a task. By distributing responsibility across many computers this effectively decentralizes it.

A decentralized system is similar to a distributed one in that it has no singular point of failure. However, decentralization changes the paradigm of common goals and messaging. A fully decentralized system does not always collaborate with each single point to achieve one sole task. Decision making is done by each part of the system as a whole. Although each is connected, it isn’t connected to every single point in terms of messaging and collaboration. With decentralization, it is truly each to its own.

Benefits of Decentralization

Decentralization means better distribution of information—and in many cases it also leads to lowered costs. For many years the music industry was able to get music fans to pay $20 for a single album of music. Now consumers can pay a low monthly streaming fee for immediate access to almost the entire catalog of popular music.

This paradigm shift has changed not only music, but also a multitude of other industries. We used to rely on bookshelf-long sets of encyclopedias for information, paper maps for directions, and newspaper classified ads for person-to-person commerce. All of those tools are either gone or severely diminished today.

Today, “online” just feels normal. The internet is now a ubiquitous utility that the developed world relies on for information. Almost without our realizing it, as a decentralized entity, the internet has become a fixture in our lives.


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