Decentralization is a core component of blockchain systems, such as Electra Protocol. In traditional finance, the transaction system is entirely centralized (provided by each bank). Customers pass control of their assets to banks, from their personal documentation to their assets themselves, for the banks to handle with full control. This system is entirely working through customers trusting the bank.
Bitcoin and other early cryptocurrencies offered a decentralized and transparent alternative, serving as the issuance and storage of money, without the need for a centralized entity and depending on trust.
Decentralized systems matter, because they empower permissionless ownership where anyone can use and build on the platform. Decisions are made by consensus, which means transactions are approved by a group of nodes as opposed to an individual node. Once these transactions are verified by consensus, they can’t be altered after the fact. Therefore, risk isn’t placed in one central entity, and trust doesn’t rely on another individual when conducting a transaction.
The trade-off of pure decentralization, however, is speed (transactions per second). If a transaction requires multiple confirmations before reaching consensus, then inherently, it would take longer than if a transaction can be confirmed by a single entity. Bitcoin is known to be robustly decentralized, but at the same time, pretty slow.