Difference Between Centralized vs Decentralized Currencies

yesterday we talked about "what is cryptocurrency", explained that the difference between the difference between digital money and conventional money is the distribution system. Conventional money uses a centralized system and crypto currencies use a decentralized system, this time we will discuss it in more detail.

The meaning of decentralization & centralization if in the sense of government science:

Decentralization is the partial surrender of government affairs from the central government to local governments to regulate and manage their own households. The task of regulating is managed by the legislative apparatus while the task of managing is managed by the executive apparatus. Decentralization of authority can be carried out by the central government in several forms (regional autonomy), ex: territorial decentralization, functional decentralization and administrative decentralization.
Centralization is the surrender of government power and authority entirely to the central government. The central government here means the president and the Cabinet Council. The authority in question is political authority and administrative authority. Political authority is the authority to make and decide policies while administrative authority is the authority to implement policies.

The meaning of decentralization & centralization if in the sense of Economy science, in case study:

The centralized nature is exemplified in the transaction model that has been used frequently by the community. For example, in this case, exemplified by parents who want to send money to their children overseas, what they do is use banking services (ATM, Mobile Banking, or come directly to the relevant bank) then transfer some money to the account number of the child. The transaction is basically carried out through bank intermediaries and trusted services.

So the process of the money transferred actually enters the bank first, then is forwarded to the recipient. The process is real time so the displacement is not felt. But what is felt is precisely because the process is through an intermediary, so there are rewards that must be paid, namely in the form of administrative fees, both issued at that time (if sending to a different bank account) or in administrative fees imposed every month.

decentralized nature means that no one is a mediator or a special party who mediates. Transactions are conducted peer-to-peer from the sender to the recipient. All transactions are recorded on computers on the network, throughout the world, or called miners (miners who help secure and record transactions on the network). Miners themselves will get commissions with virtual money used, but not everyone can become a miner, because special skills are needed with complex computational processing to solve cryptography used. This is one reason why cryptocurrency miners generally use high-specs and special computers.

Amazing Benefits of Cryptocurrency: A New Digital Future


  1. Fast and cost effective
    in the presence of this digital currency, the process of sending money will be much faster because it integrates computers throughout the world through the internet. With 1 second the money will be sent, and can be taken the same day. So this can be for a good alternative for sending migrant workers / those who work abroad for beloved families in Indonesia because it is not charged a large fee for recipients or senders, it can be said that shipping costs are less than 1 rupiah. Instant transfer by peer to peer.
  2. Free & Unbound countries
    This digital currency is not bound by any country. There is no centralized institution / government that prints digital money. but digital money is printed by users who use it for transaction needs, for example money transfers, spending, trading, etc. So it is different from real money which is directly supervised by the country where the exchange rate affects the value of buying and selling in other countries.


  1. Transactions are irreversible
    This transaction means that once transferred then it cannot be canceled, the currency sent will be given to another person will not be able to be taken back or frozen, unless the person is willing to return the digital money.
  2. Bitcoin transactions are pseudonymous
    All transactions that have been done can be seen, but we cannot detect who and where the address has a digital currency account.
  3. The amount is limited
    With a limited number of digital currencies issued, the currency will tend to rise, but it will not be possible to go down either.
  4. The value of up and down is unpredictable
    The rise and fall of a digital currency will be difficult to predict, so for the better it is only used for fast / lightning transactions.

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