What does it mean for Bitcoin to be decentralized?

The doubts about “are decentralized exchanges safe” could find some promising answers in the fact that DEXs do not have any ability to recover lost, misplaced, or stolen funds . The lack of a KYC process and the ability to cancel transactions generally leads to issues in recovering data or their assets.

In blockchain, decentralization refers to the transfer of control and decision-making from a centralized entity (individual, organization, or group thereof) to a distributed network .

Decentralized currency, peer-to-peer money, and digital currency all refer to bank-free methods of transferring wealth or ownership of any other commodity without needing a third party . Most centralized, and some decentralized, markets use fiat currency—or physical money issued by a central bank, like U.S. dollars.

Decentralization isn’t a goal unto itself. Instead, decentralization is key because it makes the Bitcoin network maximally resistant to attack from anyone who might seek to change its monetary policy and thereby threaten its inherent scarcity .