Decentralized refers to a system in which control, decision-making, and data are distributed across many independent participants rather than concentrated in a single authority or organization. In the context of blockchain and digital finance, decentralization means no central entity—such as a bank, government, or corporation—controls the network.
Instead, transactions are validated and recorded by a consensus of participants (nodes), each maintaining a copy of the ledger. This structure increases transparency, reduces the risk of censorship or single points of failure, and allows users to interact directly without intermediaries.
Decentralization is a core principle of blockchain technology and underpins the concept of trustless systems, where security and integrity are achieved through cryptography and consensus protocols rather than institutional oversight.