There are several key features of blockchain technology, such as decentralization, distributed ledgers, transparency, security, immutability, and independent network. These features make it different from any other network or database. In sub-sections, all these features are discussed in detail.
2.1 Decentralization
The blockchain contains multiple nodes having full access to sharing, creating, or uploading something new to their blocks. All miners have to trust the system instead of any third party to complete their work or to perform their transactions. We can take the bank system as an example, which is centralized, and everyone needs a bank to make secure their money as well as transactions upon this money i.e., transferring, depositing, withdrawing, and other services. Here, we can say that our money is secured. However, from another perspective, it may be a high risk because of the involvement of a third party (bank) in the middle. Therefore, a user wants to secure their money with little involvement from other parties. Here the technique, which truly works is called decentralization in the blockchain. The best examples of the financial use case of blockchain technology having the full implementation of decentralization are Bitcoin, Ethereum, Litecoin, etc.
Decentralization is the most important and basic feature of blockchain that works as a key component in a public-type network where decentralization is completely implemented. Previous studies show that the abstract view of a decentralized system and its implementation in a network of distributed information are two different platforms. Therefore, for every user, it is important to realize first whether they are working in a real decentralized system or not (Lee, Lee, Jung, Shim, & Kim, 2021). The public-type blockchain is an example of a decentralized system, where users or miners work in a truly independent environment. We can say it is more secure than the existing centralized systems. Figure 1 demonstrates the difference between decentralized and centralized systems.
Figure 1. Representation of centralize and decentralize system1