Hybrid models entail a mix of centralized and decentralized systems for optimal results. Let us look at how hybrid models bridge the gap between centralized and decentralized systems.
When we speak of hybrid models, we are not referring to a concept entirely different from what is already available.
Hybrid models are merely a combination of centralized and decentralized systems’ unique features, what you can call a blend of both systems.
Before I go any further, since we are discussing hybrid models, let’s get a basic understanding of centralized and decentralized systems so that we flow together.
What is the concept of centralization and decentralization?
For clarity, we will take a look at the two concepts that make up hybrid models separately. Let us take centralization first.
The Concept of Centralization
Centralization is a system in which a centralized authority controls the data and functionalities of the platform.
For example, if you use the Facebook platform, Facebook has complete control over the many components of its features, including the authority to decide who can and cannot join the platform.
From a technical standpoint, the centralized system requires third-party intermediaries to verify data.
This means that if you send a message to a friend using the Facebook platform, the data will be verified and sent by the platform.
Sending an email is another excellent example. When you send an email to someone else, the service provider is aware of what you sent and when.
This information is saved secretly and anonymously, but the email service has a copy.
In summary, the centralized services store your information with your permission.
If you recall, the first time you created an account on a centralized platform such as Facebook, Yahoo, Gmail, or others, you had to provide them with your complete name, nationality, date of birth, and any other information to register.
With the explanation above, we have a firm grasp of the concept of centralization. Next up, let’s see what decentralization entails.
The Concept of Decentralization
Now that we have a thorough grasp of centralization, we can easily comprehend and learn about decentralization.
Decentralization is a relatively new concept. It became public after the release of bitcoin in 2009.
This release also presented a new intriguing notion that allows for decentralization, i.e., blockchain technology. If one user delivers Bitcoin to another, the transaction is not routed through a centralized authority.
This does not, however, imply that the transaction has yet to be validated. Consensus algorithms are used to validate the transactions.
Anyone can connect to the network utilized by Bitcoin. That means it’s available. It also demonstrated other crucial aspects, such as transparency, which allows anybody to check transactions if necessary.
A person or equipment that connects to such a network is known as a “node.” Finally, there will be a network of thousands of nodes capable of sending and receiving payments from one another.
To gain a better understanding of the concept, let’s see this real-world example.
People can connect to and buy energy from other independent entities on a decentralized energy network. They don’t have to pay the intermediaries to acquire power in the first place in this manner.
The distributed energy network is based on blockchain technology and does not require a centralized authority.
The nodes that generate the energy can distribute it to the network and get compensated for it.
I believe the concepts of centralization and decentralization are both clear now. Below are the benefits and drawbacks of the centralized and decentralized systems.
Benefits of Centralized Systems
These are the advantage points that hybrid models glean from this system. Centralized systems have many advantages, some of which are;
- Minimized cost
- Command chain
- Fast implementation of decisions
Minimized Cost
The cost savings that come with centralization are one of its best features. Any network or infrastructure that is centralized costs less and needs less care.
Since centralized networks or groups are planned ahead of time, the costs that come with them only go over budget if the network needs to be expanded.
Command Chain
The command chain is clearly defined with centralized systems. When an organization uses centralization, it knows the chain of command.
This means that everyone in the organization understands their function and to whom they must report. They also know who is under their command and are accountable for their subordinates’ behavior.
All of this also implies that delegation is simple in the chain. Senior executives can easily delegate work to their subordinates and ensure the work is completed as efficiently as feasible.
When work is effectively performed, it fosters trust among workers and the supply chain, increasing the confidence essential to make it work.
When it comes to a network that uses centralization, one central node or a group of nodes is in charge of transactional verification.
Fast Implementation of Decisions
Without a doubt, centralization organizations or systems allow for rapid decision implementation.
Because centralized networks include fewer nodes or persons, there must be more communication between the various permission levels.
In addition, if a centralized network decides to make a change, it may be done in minutes. For example, a centralized network may place greater emphasis on the KYC procedure and opt to add extra restrictions to it.
Because the network is centralized, they can quickly implement new standards or adjust the KYC method, which can go live nearly immediately after adequate testing.
Drawbacks of Centralized Systems
With the many benefits of centralization, some significant disadvantages still come with the system. Some of these include;
- Single point of failure
- The issue of trust
- Scalability limitations
Single Point of Failure
Centralization also implies that the entire network is vulnerable to a single point of failure. Organizations are aware of the disadvantage and have taken steps to mitigate it.
However, the possibility of failure is a significant drawback for mission-critical services.
The Issue of Trust
Although centralized organizations are secure and trustworthy, they are only partially safe and reliable. The trust is a contract between the service provider and the user.
However, that is an agreement, and it can readily broken. From time to time, large organizations face trust concerns with their customers.
When there is a security breach in the system, consumers tend to disregard the service for a while before the service provider restores trust by delivering solutions and compensation to individuals harmed.
All of this occurs due to centralization and all data being stored in a single database.
Scalability Limitations
Single servers are primarily used in centralized systems, giving room for scalability limitations.
That aside, let’s walk through the benefits and drawbacks of decentralized systems.
Benefits of Decentralized Systems
Here are some of the known benefits of using a decentralized system.
- Data cannot be altered or deleted
- Total control
- Censorship
- Security
- Open development
Data Cannot Be Altered or Deleted.
The data structure of blockchain technology, which operates a decentralized system, is append-only. This means no one can change or edit the data once saved.
Another blockchain system that uses other data structures, such as Corda, adheres to the immutability property.
Total Control
Another significant benefit of decentralization is that users have complete control over their transactions.
This means they can initiate a transaction whenever they want without requiring authorization from a centralized authority.
Simply put, the verification process does not rely on third parties, and a decentralized network uses consensus mechanisms to validate information.
Censorship
Less censorship also comes with decentralization. There are more chances for information to be blocked in an organized system. However, because no one controls the data, the autonomous network is less likely to be hacked.
Let’s look at an example to better understand what’s going on.
Twitter, for instance, has been known to block accounts when it finds posts that are insulting or when the government tries to stop accounts because they disagree with their plans.
With decentralization, peers can talk to each other directly, so there is little to no control.
Security
Decentralized networks are secure because of how they manage data and transactions. They use cryptography to ensure the security of the data ledgers.
Also, the data in the current block requires data from the adjacent block to confirm the data using cryptography.
Open Development
Decentralized networks generally encourage open development. This is due to the nature of its operation. Because of the network’s open development environment, incredible services, tools, and products are built on top of it.
For example, Linux is open-source and includes an ecosystem that allows anyone to modify it. The same can be said for decentralized networks.
On the other hand, a centralized network or closed solutions do not have the opportunity for open development. This severely restricts development.
With that, we will proceed to the drawbacks of the decentralized system.
Drawbacks of Decentralized Systems
Despite the fantastic features of the decentralized model, there are still some disadvantages which hybrid models try to avoid, which we will look at below;
- Crime
- Conflict
- Cost implications
Crime
One major drawback is criminality when it comes to decentralized models. Because everything done on the network is anonymous, it might lead to abuse.
Conflict
When decentralization is not adequately maintained in an organizational structure, it can lead to conflict.
Cost Implications
Decentralization can be more expensive than centralization in an organizational environment since it necessitates the establishment of technologies that can automate communication.
We have successfully seen centralized and decentralized concepts along with their benefits and drawbacks. We can proceed further, knowing we have a clear, accurate picture of what we discuss in this article.
Hybrid Models: Bridging the Gap Between Centralized and Decentralized Systems
I took the time to explain what centralized and decentralized systems are all about to ensure that we can reason together. If you follow closely, you will note that the two systems have unique features that organizations can profit immensely from.
Instead of picking one system over the other and risk missing out on the unique features of the ignored system, why not use hybrid models instead?
Hybrid models provides your team with the best of both worlds, allowing untrained users to remain flexible with self-serve marketing while giving safeguards to keep your campaigns structured and compatible with brand standards.
At a time when the future is more uncertain than usual, this mix called hybrid models is not only desirable but also necessary for long-term survival and growth.
Simply put, you can’t be both at the same time. Both centralized and decentralized features are required. Organizations that adhere to a centralized approach will be restricted in their potential to expand and grow.
Going entirely decentralized is also not responsible because some components of centralized processes are required to maintain control.
The correct combination of centralization and decentralization will vary widely amongst companies because there is no one-size-fits-all solution.
The overarching goal, needs, and preferences of a business, together with personnel competencies, will help create the look of your hybrid models.
The appropriate “balance” can and should alter over time to accommodate new projects and adapt to the organization’s growth.
This way, the gap between centralized and decentralized systems can be breached when the two are included in an organizational system.
Final Thoughts
Depending on the situation and goals of a group or system, it is only sometimes possible to say whether centralization or decentralization is better.
Hybrid models may be the best way to get the benefits of centralized and decentralized systems while minimizing the problems that come with each.
Finally, the most important thing is finding the right mix that fits the organization’s values and goals.