Sources

Professor: @yousafharoonkhan
Course: Steemit Crypto Academy, season 2, week 1
Topic: Decentralized and Centralized System

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I am writing this post in response to the assignment task given by the professor MR. Yousafharoon Khan @yousafharoonkhan , I really appreciate and thankful to you sir for all your hardwork for the community !

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Question no 1 : Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.

ANSWER:

Decentralization:

Anything which don't have any kind control or can't be controlled by authority is called Decentralization. Examples: Decentralized exchanges, Blockchain technologies such as Bitcoin, decentralized exchanges etc.

In Decentralized system, the things are run or operated independently where no any kind of involvement needed of any authority. Anyone can get involvement or anyone can take part or can be the part of decentralized system.

Centralization:

If any authority , individual or any organisation have any kind of control over anything is called centralization. Examples: Banks, Companies, Centralized Crypto Exchanges(binance,huobi,bittrex) etc.

Companies , Banks and centralised exchanges have the ownership of their institution which they control and directed by thier own ways. Here the things are run or operated by thier own ways . All decision are made by the authorities. All people cannot be the part of centralized systems.

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Question no 2 :Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.

ANSWER:

Centralized system runs on the centralized system,server and database (or by any partucular authority) at the other hand Decentralized system is the system where the things run or move in the distributed or delegate away from the centralized system. Centralized system is fully controlled by central system or authority and all the decision made by the specicific authority at the other hand in decentralized system all people can be the participant and work together independently and make their own decision.

Example: there are lots of centralized crypto exchanges and there are some decentralized crypto exchanges as well . people keep their funds into centralised crypto exchanges and trade there , here the user or trade dont have their fund into their hand , neither fund nor the private key of the wallet they have . so in case of theft/hack of the exchanges or the scammed exchanges you will loose all your money , in centralized system there is always risk associated of theft, manupulation and hacking as we have seen in the past : the biggest hacking of crytpto exchange MT. GOX and till now lots of funds hacked from centralized crypto exchanges .

In decentralized crypto exchanges we dont need to keep funds into exchanges . here all funds and the private key will be with us in our personal wallet . As we dont keep any funds on exchanges so there is no chance of loosing funds if anything goes wrong with the exchanges like hacking. Here we have full control of our funds in our own hand this is why decentralized exchnages have become very popular now a days .

Question no 3 : Write five Advantages and five Disadvantages of decentralized and centralized system.

Disadvantages & Advantages of Decentralization:

Disadvantages	Advantages
misuse of the system or handling issue of the system	No control of any central Authority
conflict may occur due to different vision or may lack uniformity and quality	Anyone can be the part of decentralized system
may increase cost	Independent decision making
lack of coordination,speciality,control and quality	all control in our own hand
certain works in decentralization not possible	very safe secure , and manupulation won't be easy
emergency decision not possible	even if anything goes wrong on any server or system, still there wont be any impact on the whole system

Disadvantages & Advantages of Centralization:

Disadvantages	Advantages
no control over the anything of any normal inviduals(example: bank customers)	can make quick decision and implementation regarding business and strategy
Only the authority have the power of operation and desicion making	Can focus on standard and quality
sometimes the the business can be failed due to bad intention or wrong desicion of the leader	easy to co-ordinate with different parties and with the system
control of our all system, data or funds in the hand of central autority	avoids conflicts which can be created by different individuals. whole system or work is managened and operated by specialist by co ordination of top level authority of related system or business
system or data can be hacked, manupulated	very safe and manupulation won't be easy
if anything goes wrong with the central system . whole system or business will shut down example: data centre . server or system	professionals. specialist and executives can easily achieve the target with perfection , all centralized companies keep specialist who can solve the issues

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Question no 4 :Which one is better for Business/trading and why?

ANSWER: For business and trading there are different aspects which we should understand what kind of business it is and how we can achieve goals we have to study first properly. From business to business it varies , In some system or business we need highly qualified person who has good experience and perfection in work, here we have to go with centralized system . It totally depends upon the project, work and the company.

people always want to be freedom from the restrictions, but we need took our requirements and goals as well.

If we talk about the trading and online related things , here decentralized would be better choice as we can express the things , our thoughts, ideas.
The Decentralized system provides us freedom to work or express the things as we want .

Decentralized system are very much safe and secure as compared to the centralized system like crypto exchanges but this varies business to business .

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Question no 5 :How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.

ANSWER: We should have the idea which blockchain is centralized and which are decentrlized blockchains before choosing or making any kind or investment decision. And here i have mentioned with the help of images how we can identify which blockchain is centralized and which are decentralized.

Steps 1: visit etherscan.io

Step 2: search for the coin or the contract address of the coin you want to search ( you can also get the contract address of the coins on https://www.coingecko.com ) in my case i have searched OMG coin (OMG NETWORK)

Step 3: Click on the contract address of the coin

Step 4: Click on the contract as shown on the image

Step 5: now check Contract Source Code (Solidity) below in coding , find words such as "function destruct" here you will need to check the "admininstration" or "self destruct" . If these words are found in solidty then it can be identified as centralized or not fully decentralized blockchain based project.

In my case OmiseGo (OMG) is found to be based on a decentralized blockchain as i didnot find any word as mentioned above in solidity .

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Thanks to the Professor @yousafharoonkhan for the lecture and clearly help us understand about Decentralized and Centralized System.

Thank you all steemians for reading !