Blockchain Developer Certification Practice 2026 - Free Blockchain Developer Practice Questions and Study Guide

Decentralization in blockchain refers to the distribution of authority and control across multiple participants rather than being concentrated in a single central entity. This characteristic is fundamental to the operation of blockchain technology, as it allows for a peer-to-peer network where no single individual or organization has unilateral control over the entire system.

When a blockchain is decentralized, every participant (or node) in the network has access to the entire blockchain ledger and contributes to the validation of transactions. This collective consensus model enhances security, transparency, and resilience, as it minimizes the risk of fraud, manipulation, or failure that could arise from centralization.

Furthermore, decentralization enables the participation of a diverse range of stakeholders, allowing the system to remain operational even in scenarios where some participants fail or act maliciously. This contrasts with a centralized system, where the failure of a single entity can lead to the collapse of the entire network.

The other options do not represent decentralization accurately. Control by a single central entity and selective transaction verification fundamentally contradict the principles of decentralization, while the assertion about decentralized storage being impossible overlooks the fact that blockchain networks can indeed incorporate decentralized storage solutions, such as IPFS (InterPlanetary File System).