The Power Of Decentralization For Consumers
In the current age of digital technology, the digitization of nearly everything has led to some incredible innovations and increased efficiency and cost reduction for modern day business. Because the marginal cost of an additional unit of a digital good/service is nearly zero, businesses can save a lot of money as time passes by using digital goods or services for the necessary functions of their business. If a corporation pays for proprietary software, they will likely pay a fixed cost, one that will be quite high, but the marginal cost of an additional process or use of that software is or is close to zero.
Also read: Digital Technology to Exponentially Disrupt Business
What isn’t always obvious is the fact that businesses that are saving money in their cost-effective strategies are also passing those savings on to consumers. One important thing to note is that innovation drives consumer benefits. When technology improves, and something new is invented, consumers receive an extra benefit. That benefit can be an increase in quality of life or extra savings. If a firm is in a perfectly competitive market, there will be no profit in the long run, and that firm will offer their products at the lowest possible cost to consumers. If the firm finds a way to save on production costs, those savings will eventually be passed onto consumers.
Even if a corporation is in a non-competitive market, savings will be passed on to consumers if that company finds a way to decrease operation costs.
Decentralization does something even more unique, it takes innovation and puts it into the hands of the people, providing them with increased benefits and security. One of the reasons that projects based on the blockchain are so powerful is that customers or users of those projects are given the decentralized power of the blockchain plus whatever additional power the project/service gives them.
Decentralization has many benefits for consumers. Because these projects/services are digitized, they are already cheap to use. Becuase these projects are decentralized, they are more secure than services that rely on centralized servers.
Bitcoin is such a powerful invention due to the fact that it puts people in charge of their own finances (for free), cuts out the middleman and makes the cost of sending money to anyone in the world close to zero. Sending money via wire transfer to a foreign country (even relatively small amounts) can cost upwards of 5% while the cost of sending a large Bitcoin transaction is close to zero. Bitcoin provides people with the means to take control of their finances and have better control over their money. When projects are built on top of the blockchain, consumers receive some incredible benefits that are greater in scale when compared to a corporation saving money in their production costs.
What do you think about decentralized projects/services? Comment below!