What Is Decentralized?
Decentralized is defined as any system, platform, or means of the market that connects and allows buyers and sellers to interact without any intermediary or 3rd party to act as the regulatory oversight. This decentralization is brought about and anchored on technological advancement that keeps them off a centralized platform which in contrast has an intermediate person acting as a regulatory oversight body.
Over the years, the financial market has always relied on heavily centralized platforms to carry out all transactions. This implies that buyers and sellers had to be in the same vicinity under a regulatory body to conduct any transaction. These regulatory intermediaries are usually government-sponsored agencies. The advent of Internet technology has changed that narrative.
A decentralized platform or market connects buyers and sellers easily together by making it so much easier to conduct transactions in ways like showcasing the different types of prices available to buyers and sellers at a particular time in real-time without their presence at the same spot. This means that other buyers and sellers can be in various places and conduct transactions. Many investors and business owners tend to like the decentralized system because they see it as a way to escape government interference and control as the government does not have anything to do with these systems. That is, it is outside of government control. Some investors tend to trust this kind of transaction.
There are several examples of decentralized platforms example include
This is one of the oldest forms of decentralized systems in the world. In this system, just as defined, different buyers can connect and deal with varying sellers without a 3rd regulatory agency to supervise the deal or transaction being made.
The foreign exchange market(FX) in recent times has become decentralized. Although it wasn’t like that, nowadays, different buyers and sellers can carry market transactions in other locations. This is further made possible by brokers making use of Electronic Communication Networks to link many buyers. Prices and various commodities at different times can be viewed in real-time
These are the newest form of decentralized systems, and they are radically more decentralized than the two types mentioned earlier.« Back to Glossary Index