In an era dominated by centralized entities, decentralized infrastructures (or clouds) emerge as the bedrock for a new wave of decentralized applications. Decentralized clouds such as Dfinity‘s Internet Computer, Filecoin‘s decentralized storage, and OORT‘s decentralized data cloud drive technological innovations. The building blocks of this decentralization technology are diverse, involving blockchain, networking science, coding theory, and scheduling optimization, to name a few. However, the role of blockchain still needs to be discovered to many. This article seeks to demystify blockchain’s pivotal role in decentralized clouds for those less acquainted with decentralization technologies.
Decentralization Is Beyond Geographical Distribution
Decentralization is often perceived merely as data being processed and stored in geographically distributed servers. This is a misconception that only captures part of the essence of decentralization. The other pivotal aspect is “decentralized governance.” It means that the network’s servers are managed and operated by many independent and diverse entities from different regions, an element arguably more essential than mere geographical distribution. To illustrate, imagine if a singular organization possessed control over every BitcoinBTC mining machine worldwide; it could manipulate the Bitcoin ledger at will, potentially annihilating its value instantaneously. This scenario underscores the deficiencies and risks of relying solely on geographical decentralization, emphasizing the imperative need for decentralized governance to safeguard the integrity and balance of the system. This also highlights why tech giants like AmazonAMZN or GoogleGOOG, despite their own capability to create decentralized cloud networks, cannot supersede existing decentralized infrastructure projects—their governance remains centralized.
Blockchain Provides The Foundation For Decentralized Governance
As long as we comprehend that decentralized governance is pivotal for constructing a decentralized infrastructure, we require a mechanism to facilitate this form of governance. Blockchain is the technology that fulfills this need. The blockchain network interlinks all geo-distributed data servers globally and offers two main advantages. On the one hand, blockchain builds trust in trustless environments. For instance, a data center owner in India may neither trust nor know a data center owner in France. However, both parties need assurance that the resources contributed by the other are authentic and the rewards received are fair concerning the contributed resources. The blockchain serves as a public ledger, recording all actions of every participant in the network, like the transaction recording of every user in the Bitcoin network. The transparency and immutability of blockchain foster trust among all parties. On the other hand, Blockchain facilitates incentives to each participant via cryptocurrency. Cross-border microtransactions are crucial for incentivizing each entity in the decentralized network, a feature not supported by the current financial systems. For instance, should we need to send a few dollars to each of thousands of parties from 100+ countries, cryptocurrency is the best solution. By doing so, blockchain is the underlying necessary technology. Beyond these, blockchain avails numerous other benefits in decentralized infrastructures. We may discuss these benefits in future articles.
Decentralized Infrastructures Paves The Way For Privacy And Affordability
The ascent of decentralized infrastructures is fueled by the increasing demand for data privacy and cost-effectiveness—areas where centralized infrastructures are losing ground. While current decentralized solutions may not match the enterprise-grade performance of services like AWS or Google, the continuous evolution of technology promises a future where decentralization is the norm, pushing centralized entities to realign their strategies with this unfolding reality. While the journey of decentralized infrastructures is laden with challenges, the marriage of technologies like blockchain heralds a future of possibilities, empowering a world where decentralization is not an alternative but a standard. The nuanced understanding of blockchain’s role is crucial for embracing the future of decentralization.
