Introduction

Hello professor @yousafharoonkhan. Congratulations on your appointment. The lecture was on decentralization and centralization, and this is my attempt to answer the homework task questions

Question no 1 :
Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.
Question no 2 :
Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.
Question no 3 :
Write five Advantages and five Disadvantages of decentralized and centralized system.
Question no 4 :
Which one is better for Business/trading and why? (write in own words)
Question no 5 :
How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.

1. Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.

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Centralization

This is a system of operation, where the power in the system, is in held by a person or a group of people. Changes and decisions, that affect the general operation and records of the system are controlled by this central governing body.

Features of centralized systems

• Management:
  These lot take decisions related to the organization and take note of comments from users and members of the organization and proffer a solution.

• Hierachy:
  In centralization, instructions flows from the upper levels down to lower levels of management.
  The toplevels are responsible for taking important decisions to be implemented in the entire organization, and under normal circumstances lower management can’t challenge the decision made even if they don’t like it.

• Headquarters:
  Although all departments are required to run the organization smoothly, the power to make all important decisions lies in the hands of the central authority, located at the headquarters.

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Decentralization

This is a system of operation, where power is shared amongst several locales. Before changes are made to this kind of systems, there has to be a consensus, everybody has to weigh in. There is no location to find a central authority, as power is shared equally amongst all.

“Decentralisation means the division of a group of functions and activities into relatively autonomous units with overall authority and responsibility for their operation delegate to timd of cacti unit."
—Earl. P. Strong

Features of decentralized systems

• Difficult to discern central authority
  Delegation of equal power to numerous autonomous units makes it almost impossible to select and/or attack a central authority

• Consensus
  Decentrlization worksby consensus. There has to be a consensus on decisions for actions affecting the system/organisation to be taken

• Equality
  There is usually no hierarchy. All autonomous units are of equal power and keep each other in check

2. Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.

As we have discussed above, the major difference in a centralized system is the power to effect changes and make decisions to alter or update the system. In centralizatiion, this power is held by a person or group. There is a "headquarters" where this central power is located, while in Decentralization, power is delegated to units, spread out all over the place. The power is equally shared amongst them, changes can't be made, records can't be kept unless there is a consensus. There is no headquarters and therefore no central location.

Summary table of comparison

Parameter	Centralization	Decentralization
Power	In a person/groups hand	delegated to autnomous units
Decision System	Made by Boss	Consensus
Speed	Speed is fast, as soon as a decision	Decisions are slower, longer process, and need to consensus
Geography	Located at main headquarters	No central location
Best Use Cases	In a personal business	Global setups, NGO, Financial systems

3. Write five Advantages and five Disadvantages of decentralized and centralized system.

Centralized System

####Advantages:

1. Better Output:
   As we all know, fear is a great motivator, this is how centralized systems work. Fear and supervision of the bosses keep the lower faculties on their toes.

2. Standardization:
   There is a single process of problem solvong, proferred by the same people over and over again. This provides consistency in the standards of operation of the system.

3. Cost Effective
   Since very few or one person holds the power, there is less money spent on rewarding the decision makers for their contributions to the system.

4. Speed
   Decision making is just a straight simple process of handing down instructions from the top to the other departments.

5. Vision
   The focus on vision here is laser like, because the Boss will have goals mapped out and his success probably dependent on its success. Therefore, he makes sure there is no derailment

Disadvantages

1. Easy target
   People planning ill for the system, can attach the central authority, knowing what impact it would have on the system

2. Lack of creativity
   Fear and need to follow instructions lead to robot like output from other members of the system

3. No clear path to top
   In most decentralized systems, it is certain that you cannot as a random member of the system become a decision maker, because there are already designated permanent power hlders.

4. Dependent on trust
   For the system to work, the members have tpo trust the leader to act justly and fairly, in a case where it is not so, a crash is imminent

5. No Cross checks
   Some leaders answer to no one. No one to keep them in check, this means they can over step boundaries or underperform with little or no repercussion.

Decentralization

Advantages

1. Diversification
   Its geographical spread brings about ideas to encompass the needs of different setas of people

2. The autonomous units (maybe nodes) have the work of keeping each other in check. This makes the system more trustworthy

3. Reward system
   It has a reward system to keep all members motivated. This contributes to general output of system

4. Top executives also have reduced burdens

5. It is fast in the snse that the lower levels don't have to go through a stressful office hierarchy to effect decisions

Disadvantages

1. Lack of uniformity in standards and policy

2. Costlier to run, due to the rewards that have to be given for contributions to the system

3. In cases like blockchain, its effect on the environment due to power usage is not eco friendly.

4. Also in cases of blockchain, the cost of maintenance f these nodes, make it costly to run

5. Anonymity of transactions give way to use for illegal activities.

4. Which one is better for Business/trading and why? (write in own words)

Well, businesses could be under a lot of categories. Traders of financial markets would rather trust a decentralized system, I know I do. No system is perfect in its entirety. I believe some business models would benefit from decentralization. That being said, if I was to run a business, I would make it centralized.

Why?

The centralized system allows flexibility for a business owner, to set his standards and run his business as he deems fit. That way, if the efficiency of the owner can be trusted, the business runs smoothly and focused on the vision, because he will supervise properly. Some decentralized systems like Binance and steem include a little centralization, to key in to these advantages.

5. How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.

Well, for blockchains, I learned a new, faster way from the lecture our Professor delivered. But Prior to that;

If I wanted to know if a blockchain is decentralized, I read the whitepaper and look into the business model, Check whether it is private or public blockchain and most importantly, the consensus protocol.

While we can argue that blockchain technology itself means decentralization since the power is distributed amongst nodes, some blockchains are private. Private blockchains mean there is governance of the blockchain by a single group or body, probably the creators of the blockchain, example ethereum and tron foundations. This means there is a hint of Centralization in the system, as these bodies oversee the work of the nodes and general action and progress of the system. Transactions however are still decentralized.

Note;
As long as the blockchain technology is implemented in either of these types, with no central "trusted" node, then they are decentralized.

Conclusion

I want to thank professor @yousafharoonkhan for this enlightening lecture and interesting assignment. I look forward to next time.