It is good to have crypto academy back, as we continue in its courses. Today I am writing on Decentralized and Centralized system , Advantages & Disadvantages and which one is best for business? By @yousafharoonkhan.

Image source

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

Image source

Decentralization can be defined as the transfer of control of an activity or organization to several persons, individuals or organizations in stead of just one single person, individuals or organizations. So it can be said that any activity, with special reference to planning and decision making that are delegated to several persons rather than a singular person is referred to as decentralization.
In a decentralized system, each person makes his own decision, has freedom of speech and power moves from bottom to up. So in a decentralized system, each individual is independent, sole decision maker and is not affected by the decisions of others in the system.

Image source

Centrailzation can be defined as the control of power or activity by a singular authority, person or organization. The whole action or process are brought together in a particular place. Thus all activities which includes planning, decision making and execution are situated at a specific place or location. Power moves from the top to the bottom and every other level follows the directions from the decision making focal point.

From the foregoing, we can see that not all persons are empowered, it is restricted to a particular group or persons

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

Centralized sysyem depends on a person for decision making and to provide directions while the decentralized system relies on all levels as each has decision making autonomy.

In a centralized system there is a 3rd party involved while in a decentralized system no 3rd party is involved. It is more posssible and easier to hack and alter data in a centralized system while in a decetralized system it is very difficult.

In a centralized system the users are identifiable while in a decentralozed system the users can be anonymous.

A centralized system is also easy to use while in a decentralized system it is not easy to use or less user-friendly.

Since no one has full control of a decentralized system, it cannot be shut down easily but that is not the case with regards to a decentralized system, the controllers can decide to shut it down anytime they want inflicting pains on the users.

In a centralized system, there is high liquid since there is a central liquid pool, while in a decentralized system there is low liquidity.

Because there are so many servers working together in decentralized system, if one is faulty or packs up, it does not affect the operation of the system, it will still be working, whereas in a centralized system, once the control is faulty, the entire system shuts down.

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

Decentralized system.

Advantages

1. Security is very high, as fund are safe and it is not easy to hack.
2. The users have full control of the system.
3. Data stored are immutable, cannot be edited
4. A decentralized system leads to service efficiency thereby increasing users enthusiam for work and self confidence.
5. It lightens the load of the top management when it comes to governance and decision making.

Disadvantages

1. It will perpetuate crime and fraud
2. Gives rise to unstability in prices like in crypto currencies.
3. The cost of running a decentralized system is very high.
4. There is the possibilty of conflict if not managed and maintained well.
5. There is increased volatility as prices fluctuate a lot.

Centralized system

Advantages

1. The cost of running the system is low.
2. It also gives rise to quick decision making.
3. The command chain is clearly defined. Thus every one knows his role and his reporting line too.
4. This system leads to faster implementation or execution of decision.
5. Fraud is reduced if not eradicated.

Disadvantages

1. Security of data and personal information of user are low as it can be breached and users information can be edited.
2. Since the whole system is dependent on the top, once the top fails, the entire system also fails.
3. Centralized system also leads to censorship which many users would not want.
4. The issue of trust is another one. There is lack of trust in centralized a system.
5. Since a single server is used, scalability is low.

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

Both systems have their merits and demerits.

The adoption of a particular system is dependent on the type and nature of the business we want to do. There is need to consider our own ability in making timely decisions, which is key for the success of any business. There is need for me to consider the time frame of the business, is it for short period or do i have long term in mind.
Also what will be the effect on me if top people takes a decision that is not favorable to me thereby impacting negatively on my business, assuming I adopt the centralized system?
We also have to consider the size of the business. How will the operations be like, will some units be scattered across multiple location? Do i require high standardization of products or services, how many competent personnel do I have, Do I believe in individual freedom or am I the conservative type? How will the control systems be like, the nature and functions of the organization, the communication system I intend to exist, the business environment.

I will prefer a decentralzed system because

1. I expect the business to grow over time and expand to several locations.
2. I want train more people to become more competent and experienced, thereby increasing there efficiency.
3. the business must have an effective communication system which is only possible with a decentralized system.
4. since my objectives and policies are to be clear, i want to allow the people take independent decision in line with companies objectives and policies
   These arnd other considerations wil make me choosed a decentralized system.

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

I will do that by typing etherscan on goggle address bar

Etherscan search result on goggle

The site that opens will look like this below.

Etherscan site

I will be using (parrallel) PAR blockchain contract address to check if it decentralized or not.
0x68037790A0229e9Ce6EaA8A99ea92964106C4703

The PAR contract address pasted on the bar.

Click on the contract marked green

Check through the contract source code for FUNCTION DESTRUCT only administration or self destruct.

Non was seen there. This implies that the PAR token is decentralized token

Reference

Reference