Steemit Crypto Academy Season 4 Beginners' course - Task 4:Blockchain, Decentralization, Block explorer
(2) Define decentralization. Describe the advantages and disadvantages of a decentralized system. In what areas of life can a decentralized blockchain be helpful?
In blockchain, decentralization is the transfer of control from a centralized entity to a distributed network. Decentralized networks reduce the level of trust that participants place in one another.
When building a solution, three primary network architectures are considered: centralized, distributed, and decentralized.
Blockchain technologies often use decentralized networks. Decentralization is a scale and applied to all aspects of a blockchain. It gives greater and fairer services if decentralizing the management and access to resources in an application.
Features of Decentralization
- The Resources are owned by network members and it is difficult to maintain since no one owns it.
- Here all members have exact same copy of distributed ledger.
- The data is added only through group consensus.
- Here no one owns the data but everyone owns the data.
- Faulty tolerance is extremely high.
- The security Increases when network members increase.
- The performance decreases when network members increase.
- Blockchains are examples for decentralization.
In banks and other electronic payment systems the method used the centralized way as there is a central authority to rule and govern the system.
Due to the equal distribution of nodes’ and the duplication of platform files, it’s possible to have a system which can handle blocking, deletion and any hacker attacks from the side.
As Blockchain consists of a set of consecutive blocks where all network data is stored, then users can change a block and redirect all cryptocurrencies directly back to the account.
- Provides a trustless environment
No one has to know or trust anyone else. Each member has a copy of the exact same data as a distributed ledger.
- Improves data reconciliation
The exchange data is usually transformed and stored in each data silos. Each time the data is transformed, it creates opportunities for data loss or incorrect data to enter the workstream.
- Reduces weakness
Decentralization can reduce weakness in systems where there may be too much reliance on specific actors. These weak points lead to systemic failures, including failure to provide services or inefficient service due to the exhaustion of resources for good service.
- Optimizes resource distribution
Decentralization can also help in optimizing the distribution of resources so that services are provided with better performance and consistency.
- Co-Ordination Difficulty
Mismatching policies and procedures followed by different units makes it difficult to cordinate.
- Waste of Resources
Necessary service functions such as accounting and personnel are provided for each division separately to make divisional units self-sufficient.
- Emergency Decision are not Possible
When a company needs to make some urgent adjustments in its major policies, decentralization is a barrier.
Bitcoin is a decentralized blockchain which stores monetary transactions. it is a very a reliable way of storing data about other types of transactions. Companies that have already incorporated blockchain are Walmart, AIG, Siemens, Unilever. IBM has created its "Food Trust blockchain1" to monitor the journey of food products delivery.
A smart contract is a code that can be built into the blockchain to verify a contract agreement. Smart contracts operate according to a set of conditions that users agree to work with. The terms of the agreement are performed when the conditions are fulfilled.
This is the end of my task 4 Thank you for reading my post. Have a good day.