1. Lack of Single Point of ControlDecentralized cryptocurrencies avoid reliance on a single point of control. Traditional financial systems often have centralized entities (e.g., central banks) that dictate monetary policy. In contrast, cryptocurrencies distribute control across the network through peer-to-peer interactions, preventing any single entity from manipulating the system.
2. Distributed Ledger Technology (DLT)At the core of decentralization lies Distributed Ledger Technology (DLT). DLT enables the creation of a shared, tamper-resistant ledger across multiple nodes. Each participant (node) maintains a copy of the ledger, and transactions are recorded in a decentralized manner. The most well-known DLT is the blockchain, which powers many cryptocurrencies.
3. Open-Source ProtocolCryptocurrencies operate on open-source protocols, which means that their codebase is publicly accessible and can be reviewed, modified, and audited by anyone. This transparency fosters trust and ensures that no single entity controls the development or maintenance of the cryptocurrency.
4. Number of Active and Full NodesNodes play a crucial role in ma...