In reply to Joshua Zahrte.

Hi Joshua,

Terrific question. There is a fundamental difference between a distributed system and a decentralized system, with different use-cases.

A distributed database scales to large datasets by spreading the data (data sharding) over several database nodes. However, those distributed database nodes are all run by a single organization, and are all part of the same logical database cluster in which all nodes trust each other. Distributed databases offer performance and scalability in centrally managed environments – when owned by a single enterprise.

Decentralized systems, such as blockchains, offer consensus between external business parties based on cryptographic methods that enforce data immutability. In dApps, the various databases, services and subsystems are not owned by a single enterprise, and they need to not trust each other. The blockchain consensus mechanisms ensure that each node has exactly the same dataset, used as a “single source of truth”, enabling multiple enterprises to collaborate on a common shared data platform without the need for any intermediary. In supply chain, for example, we have multiple enterprises with a need to exchange information and transact with each other, which can be made more on a shared, yet decentralized platform (reconciliation errors and data delays disappear). In supply chain, blochain node are owned and operated by each enterprise participant. Data ownership is shared and decentralized across each participant in the supply chain.

Distributed: Data is "split up” across nodes for performance and scalability. All nodes are centrally managed by a single enterprise "single ownership of data”.

Decentralized: Each node may hold a complete copy of the data or ledger – data is not necessarily split up. Each node is managed by different enterprises with different boards and different stakeholders – “data ownership is shared across all participants.”