Mastering Blockchain - Second Edition

Disintermediation

The concept of disintermediation can be explained with the aid of an example. Imagine that you want to send money to a friend in another country. You go to a bank who, for a fee, will transfer your money to the bank in that country. In this case, the bank maintains a central database that is updated, confirming that you have sent the money. With blockchain technology, it is possible to send this money directly to your friend without the need for a bank. All you need is the address of your friend on the blockchain. This way, the intermediary; that is, the bank, is no longer required, and decentralization is achieved by disintermediation. It is debatable, however, how practical decentralization through disintermediation is ...