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Decentralization
Decentralization generally refers to the distribution of control and decision-making across a network of participants rather than having it concentrated in a single entity.
In the context of blockchains and digital assets, decentralization is used in many ways. For example, in decentralized finance (DeFi), decentralization enables financial services to operate without traditional intermediaries like banks or other financial institutions. No single person or organization controls the network. Instead, these services run on blockchain networks and are maintained by a distributed group of participants who collectively validate and process transactions.
Decentralization is a core principle of blockchains like Bitcoin and Ethereum, where the network is maintained by thousands of independent nodes instead of a central authority like a bank or government.
Advantages of Decentralization
- Increased reliability, as there is no single entity to censor or alter transactions, and the network continues to operate even if some participants fail or leave
- Improved resilience and security, since there is no central point of failure or central "command" point for attackers to target
- Decentralization of blockchain nodes can bring greater transparency by making network operations visible to all
Decentralization for Wallet Backup and Digital Inheritance
Beyond DeFi and decentralized blockchains, decentralized solutions can make digital asset wallet backups more resilient, and can facilitate distributed digital asset guardianship and inheritance.
For example, the Vault12 Guard app leverages decentralization for secure crypto wallet backups: users can back up encrypted pieces (shards) of wallet seed phrases among a group of chosen Guardians, rather than keeping it in a single file or location. Vault12 Guard also applies decentralization to support Digital Inheritance: multiple Digital Vault Guardians can collectively restore a Digital Vault so that a named beneficiary can access an Owner's Vault and the crypto seed phrases, private keys, and digital assets that are stored there. Even the network used for communication between Vault Owners and Guardians is decentralized, so that it does not depend on any single central communication point.
Given that one of the biggest risks of digital asset ownership is that an individual wallet owner (or a crypto exchange) can be a single point of failure, decentralization has been a game-changer for reducing risk for the long-term storage and inheritance of digital assets.
Related Terms
- Decentralized Finance ("DeFi")
- Digital Inheritance
- Bitcoin
- Ethereum
- Blockchain
Related Articles
- Self-Custody with Vault12: Control and Secure Your Digital Assets
- Crypto Inheritance with Vault12 Guard: a Step-by-Step Guide
- Zax - secure messaging between you and your Guardians
- How to host your own Vault12 Guard ZAX relay node on Digital Ocean
- Social Cryptography and Vault12
- Decentralized Finance (DeFi) Panel with Vault12’s Wasim Ahmad
Vault12
Vault12 is the pioneer in crypto inheritance and backup. The company was founded in 2015 to provide a way to enable everyday crypto customers to add a legacy contact to their cry[to wallets. The Vault12 Guard solution is blockchain-independent, runs on any mobile device with biometric security, and is available in Apple and Google app stores.
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You will lose your Bitcoin and other crypto when you die...
...unless you set up Crypto Inheritance Management today.
It's simple — if you don't worry about crypto inheritance, nobody else will — not your software or hardware wallet vendors, not your exchanges, and not your wealth managers. So it's up to you to think about how to protect the generational wealth you have created, and reduce the risks around passing that crypto wealth on to your family and heirs. What are the challenges with crypto inheritance?
- Crypto Wallets are difficult to use and do not offer crypto inheritance management. In fact, most of them tell you to write down your seed phrase on a piece of paper, which is practically useless.
- Some people back up their wallet seed phrases or private keys on paper, local devices like hardware wallets or USBs, or in the cloud. All of these options have severe drawbacks that range from hacking to accidental loss to disrupted cloud services.
- Software wallets operate onspecific blockchains, yet your crypto assets span multiple blockchains. For inheritance to work, you must be able to manage inheritance across every blockchain — now and forever.
Crypto Inheritance Management: Secure, Self-Custody Crypto Inheritance and Backup
Vault12 is the pioneer in Crypto Inheritance Management, offering a simple yet powerful way to designate a legacy contact and pass on your crypto assets—like Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) —to future generations. Built for everyday users yet robust enough for the most seasoned crypto enthusiasts, Vault12 Guard ensures your wallet seed phrases and private keys are preserved in a fully self-sovereign manner, across all Blockchains.
At the heart of Vault12 Guard is quantum-resistant cryptography and a decentralized, peer-to-peer network of trusted Guardians. Your critical information is never stored in the cloud, on Vault12 servers, or even on local devices—dramatically reducing the risk of a single point of failure. By fusing a powerful software layer with the Secure Element of iOS devices (Secure Enclave) and Google devices (Strongbox), Vault12 Guard locks down your private keys against present and future threats.
Our innovative approach harnesses social recovery, enabling you to appoint one or more trusted individuals or mobile devices as Guardians. These Guardians collectively safeguard your protected seed phrases in a decentralized digital Vault—so there’s no need for constant lawyer updates or bulky paperwork. Should the unexpected happen, your chosen legacy contact can seamlessly inherit your crypto assets without compromising your privacy or security.
Preserve your digital wealth for generations to come with Vault12 Guard—the simplest, most secure way to manage crypto inheritance and backup.
Take the first step and back up your crypto wallets.
Designed to be used alongside traditional hardware and software crypto wallets, Vault12 Guard helps cryptocurrency owners back up their wallet seed phrases and private keys (assets) without storing anything in the cloud, or in any single location. This increases protection and decreases the risk of loss.
The first step in crypto Inheritance Management is making sure you have an up-to-date backup.
The Vault12 Guard app enables secure decentralized backups, and provides inheritance for all your seed phrases and private keys across any blockchain, including Bitcoin, Ethereum, and others, and for any crypto wallet.
Note: For anyone unfamiliar with cryptocurrencies, Vault12 refers to wallet seed phrases and private keys as assets, crypto assets, and digital assets. The Vault12 Guard app includes a software wallet that works alongside your Digital Vault. The primary purpose of this is to guard your Bitcoin (BTC) and Ethereum (ETH) wallet seed phrases, private keys, and other essential data, now and for future generations.
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