Short answer? Both are equally important and technically speaking, the extent of privacy offered by blockchain networks is mainly the result of decentralization. Let’s have a detailed look into both of these ‘mains’.

What is decentralization and why is it so important?

What it really means is that the entire blockchain technology, whatever be the use case, is not reliant on a centralized authority or team. It rather depends on the input of the majority of the nodes (users) and hence, does not have a single point of failure. Let’s understand it from the perspective of Tarush.

In traditional payment gateway systems, all the data is stored on servers which are often in a centralized location. If anyone of them fails, a major part of the network would go down instantly, hence costing a huge chunk of business. However, since Tarush and other crypto-based ventures are decentralized, even if all the nodes go down and just one of them is left operational, the network would still operate flawlessly. It also diminishes the risk of data loss since multiple users have copies of the same data and even if one of them is compromised, another one can always answer the request. This is one of the primary ‘beauties’ of decentralization.

It is important for you to realize that essentially, blockchain happens to be a data structure and just like any of its significant others, it also needs a ‘procedure’ to store the data such that it stays uncorrupted and retrievable forever.

In order to store the data in such an impeccable way, a blockchain network runs on a core consensus algorithm. Basically, it decides which data is to be stored on the network and how it is to be stored. This consensus algorithm runs on every node and when the majority of the network (i.e. at least 51%) agrees to a certain decision, only then it is implemented.

Therefore, it is pretty evident that even a CEO or Executive Committee of any organization (running on a blockchain environment) cannot implement a decision if the majority disapproves of it.

It should also be noted that since these systems do not rely on an authority, the transaction fee and operational costs are at the bare minimum and the fee is only charged to compensate the miners and forgers running the nodes.

Due to its decentralized nature, everyone is sure that the information retrieved from the ledger is 100% authentic and untampered. This is because all nodes on the network MUST possess exactly the same copy of the state. If someone wants to play with it, a complex consensus mechanism must be altered, which is quite an expensive computational process.

What is privacy in crypto and why is it important?

The reason crypto was created in the first place was to offer freedom and privacy to everyone involved in a financial transaction. Unlike traditional banking systems and even most of the cryptocurrencies, Tarush does not record the ID of two parties involved in a transaction and nor does it record the amount. This is because of the perks offered by MimbleWimble blockchain — ensuring that none of the accounts are ever traceable.

Now if you look at it, the primary reason as to why we are able to achieve such a sheer level of privacy is because of decentralization. Since nobody on the network, not even the CEO of an organization, enjoys the liberty to implement decisions or access private information, every user enjoys the same level of privacy and data protection.

The motive is pretty straightforward — we do not want anybody on the network or otherwise to own the data or have any ‘privileged’ access to it.

A lot of people often confuse decentralization with cloud storage. Well, the concept sounds relatable at one stage or another, but in reality, even the data you upload on a cloud is stored on a centralized server and made available to you in such a way that you can access it from anywhere in the World, on any device in a matter of seconds. That may be classified as efficiency, robustness, and scalability, but not decentralization!

Another great perk is that in a decentralized network, such as Tarush and Bitcoin, sensitive information is not stored altogether. It implies that these networks are not required to store your passwords like traditional databases and rather utilize keystore methods to serve the purpose and provide any password-related functionality. As a result, you are NEVER required to trust the system or any person in any way.

That’s not the end. Decentralization does not only allow more data protection and privacy, but it also offers you the luxury of control over your data. As of now, most of the tech-giants take user data for showing personalized ads. It has become the modern way of fueling the internet economy. But in many aspects, it’s disastrous. Decentralization fosters an environment of self-governance and removes any intermediaries that may steal your data otherwise.

A word

If we view the whole scenario from a technical perspective, it is pretty evident that privacy is a requirement and one of the best ways to achieve it is through decentralization. That’s exactly what Tarush has offered with the help of MimbleWimble.

There are several different techniques in the market to offer enhanced privacy protection. However, since the core problem (centralized authority) is not countered, the person-in-charge of these systems still has full access to well-guarded systems and hence, the privacy remains at stake.

So the relation of these two is more like a requirement and a solution. We cannot prioritize any of them as superior because both are equally important to keep the user ID secure and system running at its optimum efficiency.

But you must realize that without decentralization, it is impossible to achieve a decent level of privacy.