Mon Mar 06 2023

Decentralization vs Centralization in database

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Decentralization vs Centralization in database

Both centralized and decentralized networks currently exist in popular platforms. Centralized platforms certainly have their time and place, especially for watching all activity on a network. Blockchain, and decentralized (peer-to-peer) networks are poised to become the biggest thing.

A centralized database is a database that is located, stored, and maintained in a single location. This location is most often a central computer or database system, for example, a desktop or server CPU, or a mainframe computer.

A centralized database would be used by an organization or an institution. Users access a centralized database through a computer network which is able to give them access to the central CPU, which in turn maintains to the database itself.

With the growing popularity of computers, more and more types of database orientation and design were introduced.

These are another type of systems which have been gaining a lot of popularity, primarily because of the massive hype of Bitcoin. Many organizations are trying to find the application of such systems. Decentralization is actually one of the most important benefits of using a blockchain protocol.

In decentralized systems, every node makes its own decision. The final behavior of the system is the aggregate of the decisions of the individual nodes. Note that there is no single entity that receives and responds to the request. Decentralization was first made possible using blockchain technology. The first ever blockchain was the Bitcoin client, which was created in 2009.

Decentralization vs Centralization

  • Centralization of authority means the power of planning and decision making are exclusively in the hands of top management. It alludes to the concentration of all the powers at the apex level. On the other hand, decentralization refers to the dissemination of powers by the top management to the middle or low-level management. It is the delegation of authority, at all the levels of management.

  • People don’t need to identify themselves to interact with a decentralized system. They simply use a private and public key, meaning they can remain anonymous.

  • A centralized approach to logical and physical data management will promote the development and use of integrated, shareable data throughout applications, preserve the quality of that data and serve the needs of the business more effectively.

  • A decentralized system that operates on the blockchain is controlled by no single authority, nor is it backed by any centralized government or nation-state.

  • Centralized databases store data on a single CPU bound to a single certain physical/geographical location. Decentralized databases, however, rely on a central DBMS which manages all its different storage devices remotely, as it is not necessary for them to be kept in the same physical and/or geographical location.

  • Centralized databases are easier to maintain up to date than decentralized databases. This is so because decentralized databases require additional (often manual) work to keep the data stored relevant, and to avoid data redundancy, as well as to improve the overall performance.

  • It would be much harder to retrieving lost data in a centralized system. In a decentralized system, retrieving lost data would be very easy, because there is always a copy of the data in a different location of the database.

  • Designing a centralized database is generally much less complex than designing a decentralized database, as decentralized database systems are based on a hierarchical structure.

  • Every single bank in the world operates on centralized servers. This means that they have access to your entire financial activities. Furthermore, if somebody was able to get a hold of your internet banking password, or even worse, hack the bank’s centralized servers, they would have access to all of this information.

  • A decentralized payments system solves all of these issues. When you use a cryptocurrency to send or receive payments, you don’t need to rely on a third party to confirm the transaction. This is why Bitcoin and other cryptocurrencies are called “peer-to-peer digital currencies”.

  • In a decentralized system, there is no requirement for a third party. Because of that, fees are substantially less and in some cases are practically free.

  • The centralized system provides better data preservation than other types of databases due to often-included fault-tolerant setup.

  • Decentralized systems are borderless, so it makes no difference if you are sending someone money to somebody in your hometown, or to someone on the other side of the world.

  • In a centralized system, all the information can be accessed at the same time from the same location.

  • Centralized platforms require all data to enter into, and leave through a central hub. That is to say, you physically can’t send or receive any information without it going through that single point, which is often a private server or hub. Unlike centralized platforms, decentralized platforms do not require information to pass through a single point. Instead, many points connect, known as a peer-to-peer (P2P) network.

  • In centralization due to the concentration of powers in the hands of a single person, the decision takes time. On the contrary, decentralization proves better regarding decision making as the decisions are taken much closer to the actions.

  • When the organization has inadequate control over the management, then centralization is implemented, whereas when the organization has full control over its management, decentralization is implemented.

  • Centralization is best for a small sized organization, but the large sized organization should practice decentralization.


There is a never-ending debate between these two terms to prove which one is better. To determine whether an organization is centralized or decentralized, that greatly depends on the location of decision-making authority and the degree of decision-making power at lower levels.

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