Crypto Academy Season 3 Beginners' course - Task 2: Blockchain, Decentralization, Block explorer
(1) Write the definition of blockchain. And how our data on Blockchain is protected from hackers. ? And write details about Data, Hash, and Previous Hash tag and explain through screenshot.
(2) Define decentralization. Describe the advantages and disadvantages of a decentralized system. In what areas of life can a decentralized blockchain be helpful? (write-in own words)
(3) What is a block explorer? And what is its purpose and use? Search for different cryptocurrency block explorers and list them below. At least five different cryptocurrencies. Also, explore the transaction of a crypto coin on block explorer and explain with the help of a screenshot.
Decentralization was brought in to tackle centralization. Firstly, I would love to explain what centralization is, so we can know the reason why Decentralization came into the picture.
Centralization is a system in which all the information, transactions and data were stored, controlled and managed by one person or one system somewhere. A typical example of the Centralized system is the banking sector or even other traditional financial institutions. In the system, there is a huge demarcation between you and your money in the bank.
What or who is that demarcation, it is the bank itself. Before you can have direct access to your money, you need to go to the bank, queue for hours, and ask the cashier for your hard earn money, somethings you have to go to the ATM stand and wait for hours before you can withdraw your money and sometimes, the ATM can be unable to dispense cash.
This is what has been going on now before a man named Satoshi Nakamoto decide to make the Digital currency with the sole Aim of Decentralization of the Currency in blockchain from the traditional banking system.
So what is Decentralization?
Decentralization is simply means taking control and making decisions yourself without the interference of any other third party be it the bank, individual, organization, or any group. Decentralization was brought into existence with the sole aim of eliminating the centralization.
Decentralization in blockchain makes you the boss over your money and also reduces the rate of trust that owners must place in one another. Currently, Blockchain technologies make use of Decentralized networks. In a Decentralized system, there is no center where all the information meets before diverging, but all the participants which are under the decentralized system is independent and normally run his transactions without the interference of any third party.
A decentralized system has come to stay, though it has come to stay, i know it has it good and bad parts, Let's quickly look into them
Advantages of Decentralized System
- The main reason why the Decentralized system was brought into existence was to transfer the power and authority from a third party to yourselves. This is the biggest benefit of the decentralized system. You are the one in charge. You don't need to know or trust anyone else.
- Fowl play and dubious act can be reduced to its minimum using a decentralized system because everyone in the system can see everything he/she wants to see from anywhere and anytime.
- With the Decentralized system, financial transactions is done easily, and faster and can be done as many time as possible.
- There is full freedom of expression of the user, you can make decisions without any form of interference.
Disadvantages Of Decentralized System
- Due to the unlimited access to make decisions, someone can make a mistake that everybody will suffer for it.
- One of the biggest disadvantages, is the unlimited control of your funds, in the traditional banking system, there is a limit place to amount of money you can withdraw but using a Decentralized system, you can be a victim of an illicit spender, that you might regret at last.
- Using the system requires a high level of knowledge, not everyone can effectively use the system, due to the high level of illiteracy in some societies.
- If you made a mistake, it can not be reversed. Once a mistake has been, it has been made. that is why high level of knowledge is highly needed.
- It can be used in the health sector, to store information of the patient and the patient's disease in case the patient was transferred to another hospital. Using a Decentralized system, it will be easier for doctors to get that information easily.
- It can also be used for land sales and its records. Using a decentralized system, all the land sold and bought can be on the decentralized blockchain system, to avoid every form of foul play and dubious act. The issue of land cases in the country can be seen in every courtroom because of the high level of fraud.
- True Democracy can be achieved using the decentralized system, Using a Decentralized system during political elections will drastically reduce the electoral rigging that has been going on now for decades. if votes were cast on the blockchain system, it will easily end all the political unrest that is been seen in different countries currently.
- It can also be used for storing federal Government data, in federal government paracetals. information like the federal patent, trademarks, passports, visas, social security etc.
In conclusion, a Decentralized system truly makes you in control of your money, information, and other things. it has come to stay but lets us embrace it closely. Because up till this time, some people have no knowledge about it and they still go through some of the tedious and stressful process brought by the financial institution for your hard-earned money. A decentralized system has very high-level security which can openly reduce fraud. A decentralized system is a welcome development we should all use.
Cc @yousafharoonkhan , @nane15