Blockchain, Decentralization, Block explorer - Steemit Crypto Academy Season 4 - Homework Post for Task 4
Question
(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)
Decentralization
Before we get into Decentralization, we should know about the opposite of it ; what is Centralization means. Centralization means a system is controlled by a single authority/person.
Question
(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)
eg :
- Local Banks are controlled by Central Bank of the country
- Apple company in US controlled all the production of Apple Products
Centralization
Image Source
Then What is Decentralization?
Decentralization means that the system is NOT controlled by a single authority/ person. The controlling power is distributed among the every unit in that system.
eg :
- Cryptocurrencies
- McDonals Resturant chain
- KFC Resturant Chain
- Pizza Hut
Decentralization Image Source
Difference between Centralization system and Decentralization system
| Centralization | Decentralization |
|---|---|
| Single Authority/Person control whole system | Not controlled by single Authority/Person |
| Decision making Comparatively Slow | Decision making comparatively Fast |
| Decisions make by Single Authority/Person | Decisions make by members in the system |
Advantages of Decentralized System
- Everyone in the system gets equal chance to make decisions in the system.
- Power is equally divided in the users in the Decentralized system.
- Everyone in the system can easily access to their money anytime.
- Decentralized system cannot be shutdown by few people unless the entire Decentralized system shutdown.
- Transactions in Decentralized system is cheaper, Faster and more impotent is very High Security . So 3rd party cannot observe the transactions and cannot hack them.
- Burden on single person/government will reduced.
Disadvantages of Decentralized System
- Lack of Co-ordination in the system.
- Since Authorities cannot monitor system , there are higher chances using it for illegal activities.
- For introduce a Decentralized system may cost very high expenses.
- Users in the system has 100% control of their own fund and it make their own responsibilities high.
- If you do any mistakes while transferring fund in Decentralized system you have to be 100% careful and if you use wrong address, you may loss your funds.
- The policies which were established in the beginning of the Decentralized system may not be followed continuously.
In what areas of life can a decentralized blockchain be helpful?
Lot of developing countries face a huge problem in Centralization in Education. People who have money may go for the best schools, universities. And after that they will gain Better Jobs in the society.
If we can decentralize the education system, everyone may take equal chance to get high quality education and have chances of better Jobs in the society. This will reduce the poverty in the society and will improve the quality of Education.When it goes to the Local Banks, they have faced lot of problems when the user's bank accounts were hacked. While there are lot of trend in internet banking, online shopping, banks have to find a way to improve the security of the user's funds. But every Banks are controlled under a centralized system , it's hard to monitor every blanks.
So if they can use the feature of decentralization blockchain, it will help to improve the services of the bank and may secure from hacking.Since there are lot of trending for Internet jobs and investments, decentralization blockchain system gives safe transaction of funds. When use cryptocurrencies, it helps to do a safe transfer and no 3rd party can get your transaction details or hacked.
Lot of companies has centralized system and it leads to lot of corruptions system. Worker's only work to fulfill their immediate higher management even it harm the company. They only work for their own benefits. So higher management may give promotions and bonus for Only the workers who do their favors. So the workers who do their jobs correctly may loose their jobs.
And some workers may get bribes to do the relevant works and the company may get lot of loss.
So if the companies can use decentralized blockchain system all activities will get transparent and it will helps to develop the company. Corruptions may reduce and everyone will work hard to develop the company.
I hope you all learn more about "Blockchain, Decentralization, Block explorer" from this post.
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