[bitcoin-dev] Your Gmaxwell exchange

[Monarch]

On 2015-08-31 21:54, Justus Ranvier wrote:
> 
> You keep using the word "decentralized" without explaining (and most
> likely, understanding) what it means.
> 

Decentralization is a ubiquitous term within the Bitcoin, and the
definition is by no measure new or often confused.  It is realizing
that systems involving trusted third parties have undesirable
properties, be it regarding privacy, fraud, censorship, and removing
the effect of them as much as is physically possible.  WASTE and
RetroShare are examples of decentralized messaging and file
distribution systems, acknowledging the privacy problems involved with
centralized systems like AOL Instant Messenger or IRC.



> What does it mean to use a decentralized network instead of a trusted
> third party to process electronic payments? What undesirable actions 
> can
> a trusted third party perform that a decentralized network can not 
> perform?
> 

Bitcoin is a decentralized currency which allows any person the
ability to transact in a way that does not require specific trust in
any particular party.  Users can independently verify that
transactions they receive are valid and confirmed, with strong
confidence that they can not be reversed or modified.  A third party
does not hold these same properties, there is no reason to believe the
information they present other than trust they will not lie, cheat, or
violate privacy at their own will.  Given information by a trusted
third party (such as a balance or existance of transaction), a person
has no ability to independently validate their claims as you do in a
decentralized system.