Decentralization
What is it?
In today’s world, our businesses, our money, our games, our social networks, our mailboxes, and all our children’s photos and personal documents are all primarily digital. All the digital logins and passwords that allow us to access our most important stuff are held by the various companies offering those services. The “stuff itself” - all the bits and and bytes of your life - are largely stored under two or three massive web umbrellas, like Google or AWS.
The concept of decentralization is just the idea of organizing that stuff in a different way. Instead of a few massive web giants doing all the digital work, thousands of independent participants share responsibility across a secure global network.
Why Decentralization?
There’s a massive amount of opportunity, convenience, and other benefits with digital technologies and services. However, there are downsides. Centralized services control access to these services and not everyone gets fair access. In return for offering these services, centralized providers reap all the monetary rewards. In addition to potentially charging you directly for the convenience of use, they also harvest our data at scale and sell it to the highest bidder. Ultimately, huge centralized services hold all the power and don’t always wield it for the greater good.
Decentralization redistributes that power. It eliminates single points of failure, limits exploitation, and aligns incentives more closely with the people who actually use and support the system.
The D-Words
dApp
What is it?
A dApp (Decentralized Application) is software that looks like a normal app, but whose core logic runs on a blockchain via smart contracts. A smart contract is just a bit of logic and code that says when and how to execute a blockchain transaction. The interface will live in your browser or phone, and it might feel like a totally normal app to you as the user. But under the hood, the rules and records live on a decentralized network instead of a private server.
Why dApps?
DApps inherit the strengths of blockchains: transparency, tamper-resistance, and shared control. They reduce reliance on intermediaries and they may lower infrastructure costs. DApps allow users to interact directly with systems that enforce rules automatically and predictably.
DeFi
What is it?
DeFi (Decentralized Finance) refers to financial tools, like trading, lending, borrowing, and earning yield, that are built on blockchain networks using smart contracts. Instead of banks or brokers, users interact directly with code (ie smart contracts) and with each other.
Why DeFi?
DeFi removes gatekeepers. Anyone with a wallet and internet connection can access financial tools, often with more transparency, fewer restrictions, and lower fees than traditional systems. It opens global financial participation to people historically excluded by geography, paperwork, or institutional bias.
DEX
What is it?
A DEX (Decentralized Exchange) is a platform that lets users trade cryptocurrencies directly with one another using smart contracts. There is no central company custodying funds or approving transactions.
Why DEXes?
DEXes reduce counterparty risk - you keep control of your assets at all times. They also tend to offer broader access to new assets, with lower fees, 24 hours trading, and fewer restrictions. Notably however, this access comes at the cost of higher user responsibility and a steeper learning curve.
DAO
What is it?
A DAO (Decentralized Autonomous Organization) is a way of coordinating people and resources using blockchain-based rules and voting. It’s an idea to replace the top-down organizational structures used in everything from companies to governments. In a DAO, decisions are made collectively by stakeholders, rather than dictated by a centralized leadership structure.
Why DAOs?
DAOs decentralize power. They enable communities to govern themselves transparently, fund shared goals, and evolve rules through open participation. A DAO aligns incentives between contributors, users, and decision-makers. Francis Galton’s famous 1907 experiment proved the idea of collective intelligence. DAOs finally give us a way to leverage it.
DPIN
What is it?
DPIN stands for Decentralized Physical Infrastructure Network. It describes systems where real-world infrastructure, like storage, connectivity, sensors, or computing power, is owned and operated by many independent participants. The work, and the rewards, are coordinated through blockchain incentives.
Why DPIN?
DPIN challenges the idea that infrastructure must be owned by large corporations. By allowing individuals and communities to contribute physical resources and earn rewards, DPIN aligns ownership, governance, and value creation with the people actually providing the infrastructure.
DID
What is it?
A DID (Decentralized Identification) is a way to represent identity using blockchain. It challenges the idea that central governments, banks, schools, and institutional authorities are the only trustworthy ways to establish identity. Credentials are issued, held, and shared by users themselves, not stored in a corporate database.
Why DIDs?
DIDs give individuals control over their identity and reputation. You can prove what you need to prove, such as age, attendance, or credentials, without oversharing personal data or relying on a third party to safeguard it. It means you always have access to your personal identity documents, without having to pay for your transcript or a reprinted birth certificate.
Decentralized Storage
What is it?
Decentralized storage distributes data across many independent nodes instead of housing it in centralized data centers. Systems like IPFS, Filecoin, and Arweave replace “location-based” storage with content-addressed, verifiable data. In a decentralized storage network, individuals participate by pooling together their own personal computers and servers to create a massive network resource.
Why Decentralized Storage?
Centralized storage creates single points of failure, censorship, and data exploitation. Decentralized storage increases resilience, durability, and user ownership. It ensures data can persist even if one company, country, or server goes offline.
dProv
What is it?
I just made this one up! Sort of…. All the “D-words” in this series are recently invented terms. Bitcoin - the granddaddy of blockchains - isn’t even old enough to buy a beer, and all of these decentralization ideas are building on the concepts made possible by blockchain. Some of these D-Words are older and more well-known than others. The “words” are invented or established in the zeitgeist as the ideas behind them start to catch on. So with that, we would like to debut a new D-Word: “dProv.” The concept of decentralized provenance or traceability is not new. In fact it’s a huge and growing use case for blockchain. However, it doesn’t have its own dedicated d-word yet, and I think it deserves one. So with that….
DProv refers to recording the origin, history, and movement of data, goods, or credentials on a blockchain. It creates an immutable, verifiable chain of custody without relying on a single authority.
Why dProv?
Verified provenance builds trust and paves the road from producers to consumers, with all the stops in between. Whether tracking supply chains, digital assets, research data, or credentials, dProv makes it possible to verify where something came from and what happened to it, without blind trust, paperwork, or centralized record-keepers. It may enable small producers and marginalized people access to markets and opportunities that were previously not within reach. It enables producers to meet new global regulations and sustainability goals in a reliable way. It gives governments, buyers, and consumers the information they need to make smart and sustainable decisions.
Web3
What is it?
This one doesn’t start with a “d” but I think it belongs here. Web3 is the evolution of the internet, built on blockchain technology. It’s an internet where users control their data, identity, and assets. Instead of giant platforms owning everything, individuals hold the keys. In other words, it’s the internet you know and love - but decentralized (by leveraging all the cool d-word ideas explained above). Web3 ideas are usually also inclusive of the idea of AI technology becoming more enmeshed in the internet of the future.
Why Web3?
Web3 shifts the internet’s power structure. It replaces surveillance-based business models with ownership, permissionless access, and programmable trust. It’s about creating a digital world where users aren’t the product, but the participants.
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