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Introduction

Hello everyone, how are you all doing? , hope you are all doing well. Here to take the crypto academy season 4 task 4 course which is about decentralization, thanks to prof @yousafharoonkhan for his explanation on this course.

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Entry Question;

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• Define decentralization?
• Describe the advantages and disadvantages of a decentralized system
• In what areas of life can a decentralized blockchain be helpful?

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Decentralization

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Decentralization can be defined as the process by which an organization that is run by a single board, transfer control of power in making a certain decision to several local authorities rather than having one person make the decision.

In a blockchain, Decentralization can be viewed as a transfer of control from the main entity and can be either an individual, group of people, or an organization to a distributed network that doesn't deal with one person being in control. An example of a decentralized organization in the blockchain is bitcoin.

The reason why blockchain run a decentralized system is that blockchain technology can not be controlled by a single head, running a decentralized system, the system was able to build a great and fair service, it was able to run a low transaction system which helps to cut the amount used in running the system, it also helps to improve the service produced by the system.

In one sentence, Decentralization simply means the transferring of possession of power to individual, in a case that each individual have control over there asset without a third party involved , just as it implies "Decentralization" meaning no KYC(Know your customer), you are the one in charge of your asset and in full possession of it.

Describe the advantages and disadvantages of a decentralized system

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Advantages of decentralization

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• Provides a trustless environment: in decentralized network, you don't have to know or trust anyone because every member has there own private keys to there asset, which implies that, you don't need external help from anyone carrying out your transaction or others signature as you are been blessed with your own private keys which are only to be known by you and carry transactions base on.

• Reduces points of weakness: In blockchains system, running a decentralized network reduced many points of weakness which could lead to a system failure, and these failures may includethe inability to provide a sufficient service, and this can be due to bottlenecks or exhaustion of resources. That's why in blockchain whenever a block is filled then another block will be automatically created which will be indicated by the hashtag added to the new block, like block 0 which has 1#, block 1 has 2## continuously like that.

• Fast transaction: A decentralized blockchain-base cryptocurrency network create a mode of transaction which are much faster and better than our local banks, in a way that making transactions on blockchain won't take more than a few minutes to complete the transaction, but some of our banks' transactions take days before getting the confirmation of your transactions, this shows how flexible decentralized network is compared to a centralized network.

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Disadvantages of decentralization

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• Volatility: In a decentralized network, it's very possible to have a volatile system, in the case of cryptocurrency, taking bitcoin as an example, it is not uncommon to find the coin fluctuating from positive to negative, this reaction does cause users to lose some asset and sometimes gain more, thus cause new investors to have doubt in investing in cryptocurrency.

• Crime: Due to the anonymity involved in decentralized system, this provides opportunities for some fraudulent activity to take place on the system, like the known black market operation, where they rely on decentralization secrecy in making all kinds of illegal transactions and thus get away with because of irreversibility and untraceable.

• Storage issue: Storing blockchain-based cryptocurrencies can be a huge problem for people who are not into tech, especially for those who are not financially abundant. It's kind of easy for those big business owners because they will be able to buy storage called "cold storage", buying this storage might be hard for the average business.

In what areas of life can a decentralized blockchain be helpful

The above explanation shows how useful a decentralized system is to any organization, thou, there is no system that doesn’t have its little setback but I believe the advantage decentralized system brings is more helpful to any organization.

The following are areas where decentralized blockchain is helpful:

• Business Sectors: Decentralized network is more helpful to the organization, business owners because it creates a safe world where business transactions can be made peacefully without the interference of the third party and it also has records of transactions which are kept safe, the transaction cannot be altered when made.

• Cost-free network: In blockchain decentralized system makes it be a cost-free system where users don’t have to be worried about the cost of the system or been charged for each of the transactions made on the system, this makes business owners be mind free about the system not like the local banks where you will be charged for savings and withdrawals of your money saved in the bank.

• Safekeeping Properties: It is advisable to keep properties or assets on a blockchain network instead of using your money to buy other assets like watches, cars, and so on because all these kinds of assets do depreciate, but by using your money to buy coins and let them appreciate, you will be able to make more money with your unused asset which you use to buy that coin, it is another way of keeping properties.

Conclusion

With the above explanation and examples given, I hope we all are able to learn more about the decentralized systems, also how useful it is to most organizations compared to a centralized system, special thanks to @yousafharoonkhan for his explanation on this course which also of to help me in understanding more about decentralization.Thank you all, for spending your time to read, see you nearest.

Cc;

@yousafharoonkhan