Centralized VS Decentralized Asset Ledgers

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A centralized asset ledger is a list of transactions that is controlled by a single entity, such as a bank statement. The bank has total control over which transactions are posted on the ledger. For example they can fine you and directly take money away from you without your consent. This is a danger of centralized ledgers because if the entity-in-charge has malicious intent, it can do some serious damage to its clients. Another disadvantage of a centralized ledger is the controlling entity can shut down without notice and transactions will no longer be processed. Giving this kind of authority to someone will result in error, whether it be accidental or not. The answer to this problem is a decentralized ledger. Without a central entity, there is no one capable of cheating the system and transactions will be entered in an honest manner. The decentralized ledger in bitcoin is made possible by the concept of "Proof of Work".



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JGo

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