Is Decentralization Of Bitcoin An Advantage Or Disadvantage?

Bitcoin is the most potent version of virtual cash. Bitcoin is digital coinage having a massive store value in the global marketplace. The current store value of bitcoin is nearly $50000. However, at the time of the first-ever purchase, the value of bitcoin as a payment method was just $0.0042. Thus, the concept of cryptocurrency was present way before bitcoin.

Undeniably, there were ample centralized digital currency models in the marketplace before bitcoin. However, bitcoin was the first-ever decentralized cryptocurrency with robust technologies such as a peer-to-peer network and blockchain.

Following bitcoin, there were many other cryptocurrencies in the marketplace similar to bitcoin. However, most cryptocurrencies like ethereum, Binance coin, dogecoin, Cardano, and many more are politically independent. Recently, China created a digital version of the yuan.

Bitcoin’s decentralization feature is one of the fascinating aspects as it offers multiple features to the users. If you want to get profitable results in your bitcoin trading venture, check this software for more detail. However, several economists also say that bitcoin’s decentralization feature is also a drawback for the bitcoin complex. So, let’s find out whether decentralization is an advantage or disadvantage.

What does decentralization mean?

Federal banks and national financial authorities of different nations control fiat currencies like INR, Euro, USD, etc. These authorities are potential and capable of creating and destroying currencies for the sake country’s economy.

However, these countries have failed several times to do so. After the economic abysmal of 2007, a Japanese programmer named Satoshi Nakamoto decided to invent bitcoin, a decentralization.

Bitcoin’s decentralization refers to the non-involvement of government authorities and financial institutions in the bitcoin complex. In a nutshell, No higher authorities can destroy or ban bitcoin units.

How does bitcoin achieve decentralization?

Almost every possible aspect of the world is dependent upon the government authorities and higher powers. In a wholly centralized world, bitcoin has still managed to achieve decentralization, but how? Bitcoin underlies the technology of peer-to-peer networks and blockchain technology. Both peer-to-peer networks help bitcoin in achieving decentralization.

Peer to peer network is a set of computing entities or nodes which collectively regulate the system of bitcoin. There are more than 10000 nodes or computing systems present in the peer-to-peer network. Moreover, every node of the peer-to-peer network has a copy of the blockchain. Thus, the blockchain contains bitcoin’s verified transactions, and it is a public database.

Is decentralization of Bitcoin an Advantage or Disadvantage?

The decentralization of bitcoin is both an advantage and disadvantage; let’s find out how.


Bitcoin’s decentralization feature offers you significant advantages, and some of the prominent advantages are as follows.

Lower transaction cost

Traditional banking system levies an exceeding extent of the transaction cost. In international transactions, you have to pay a tremendous amount of transaction cost even if you receive the transaction cost. However, bitcoin trustable exchange levies you a significantly less amount of transaction fees. All the more, you don’t have to pay any transaction fees even if you are receiving an international transaction.

Irreversible transaction

Every e-banking platform and Credit Card Company offers you a feature of buyer’s protection. Buyer’s protection allows the buyer to file a dispute with businesses and service providers. Unfortunately, many buyers use such features to fraud small-scale businesses and service providers. However, bitcoin’s decentralization feature allows you to process irreversible transactions. Irreversible transactions mean that no one can reverse their funds.

These are the two utmost promising advantages led by bitcoin’s decentralization.


The mere disadvantage led by bitcoin’s decentralization is its volatile nature. Since bitcoin is entirely decentralized and no government authorities are backing up bitcoin, bitcoin’s store value is very fragile.

Undeniably, bitcoin’s volatility is a significant advantage for bitcoin traders and investors, but it cannot act as a proper currency due to its volatile nature. Due to bitcoin’s volatile nature, many countries are now developing solid cryptocurrency regulations and rules. All the more, China has even banned bitcoin due to its volatility, environmental toll, and facilitation of illegal transactions. El Salvador has promised its population to offer the best in class liquidity to avoid the chances of volatility.

These are some of the advantages and disadvantages of bitcoin’s decentralization.

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