Thursday, February 24th, 2022 | Cryptostotle #6 | By: Brad Lathrop
A key trait of Bitcoin that makes it very attractive to investors and proponents is its decentralized nature; there is no central authority that controls Bitcoin.
This is a complete 180 from fiat currencies, like the US dollar, where the Federal Reserve works to control and influence the value of the US dollar (interest rates, money supply, etc.).
With no central authority controlling it, Bitcoin has taken on the character of existing and operating free of corruption from big governments, and rightfully so. Many fiat currencies cannot say the same.
All transactions involving Bitcoin are recorded on the Bitcoin blockchain. This is a public ledger – one in which developers can access the ledger and verify any transaction that takes place. It’s all right there.
This public ledger creates transparency and helps build trust in the system. To add, Bitcoin is open-source, which means anyone can access the cryptocurrency’s source code at any time. More transparency!
There are also no middlemen involved in Bitcoin transactions, which enhances its security as there are no opportunities for corrupt third parties to commit financial fraud within a transaction.
One final note: Bitcoin’s transaction validation process, which is called “mining” and is something I’ve discussed in a previous post here, is also decentralized.
Anyone with the right computer hardware can process Bitcoin transactions from anywhere in the world – there is no central authority or ruling entity that oversees that either!
In summary, Bitcoin’s decentralization gives it greater security, reliability, and transparency in the eyes of its proponents (compared to fiat currencies).
This is a key way Bitcoin builds trust amongst its advocates, investors, and users.
