Decentralized and Centralization system

Answer to question 1

> Decentralized and Centralization system

> Decentralized system

In computing terms, a decentralized network architecture distributes workloads among several machines, instead of relying on a single central server. This trend has evolved from the rapid advancements of desktop and laptop computers, which now offer performance well beyond the needs of most business applications; meaning the extra compute power can be put to use for distributed processing.
As its name implies, decentralized systems don’t have one central owner. Instead, they use multiple central owners, each of which usually stores a copy of the resources users can access.

A decentralized system can be just as vulnerable to crashes as a centralized one. However, it is by design more tolerant to faults. That’s because when one or more central owners or servers fail, the others can continue to provide data access to users

Resources remain active if at least one of the central servers continue to operate. Usually, this means that system owners can repair faulty servers and address any other problems while the system itself continues to run as usual.
Server crashes in a decentralized system may affect the performance and limit access to some data. But in terms of overall system uptime, this system offers a big improvement over a centralized system.



However, decentralized systems are still prone to the same security and privacy risks to users as centralized systems. And while their fault tolerance is higher, this comes at a price. Maintaining a decentralized system is usually more expensive.

> Centralized System

In a centralized system, all users are connected to a central network owner or “server”. The central owner stores data, which other users can access, and also user information. This user information may include user profiles, user-generated content, and more. A centralized system is easy to set up and can be developed quickly.

Answer to question 2

> Comparison between Centralized system and Decentralized system

Ultimately, network centralization was created as a way to improve efficiency and take advantage of potential economies of scale. On the other hand, decentralization looks to improve the speed and flexibility of your network by localizing processing power to the individual user. And these are some of the difference between them.

> Maintenance
Cebtralized system: is Low
Decentralized system : is Moderate

> In Scalability
Cebtralized system: is Low
Decentralized system : is Moderate

> In Development
Decentralized : is Moderate
Centralized system: is High

> In Revolution
Cebtralized system: Low
Decentralized system : is High

Answer to question 3

> Advantage and disadvantage of Decentralized system and centralized system


  1. Decentralization may be, in part, merely the result of circumstances

  2. It helps to coordinate work and put all activities on track. There are certain special circumstances forcing managers to reserve authority and centralize decision-making power.

  3. Actions can be focused on what needs to be done and duplications can be put to rest.

  4. It becomes easy to get all units and people do the same thing in the same way at the same time without wastage of resources and energies.

  5. Decentralisation is the best solution to handle emergency situations—such as declining sales, cutting costs, using resources productively, pushing a competitor to the wall, handle policy

However, centralization makes it extremely difficult for managers to process the bundles of data regarding products, markets, costs, finances, people etc., in quick time and take decisions in an appropriate manner. The managers are burdened with a great amount of detailed and exhaustive work; they have to work for painfully long hours and take a stuffed briefcase (of problems) home with them.

Centralization forces top management to possess a broad view that may be beyond their capacity (Carvel). The vast amount of power given to a few people may be abused (power corrupts absolutely, and may be used as a ‘whip’). More dangerously, the fortunes of the organization depend on the health and vitality of top management people. The organization is highly vulnerable to what happens to its dynamic and talented top management people. Centralization floods communication lines to a few individuals at the top of the organization.

As a result, the speed of communications upward and decisions processes are slow. Lastly, centralization kills the initiative, self-reliance and judgment of lower level personnel. It inhibits the development of operating personnel.

> Disadvantages of Decentralisation:

Decentralization is not a sure bet. It could prove to be a troublesome exercise if not carried out in a proper way, in the following ways:


  1. Conflict:

Decentralization puts increased pressure on divisional heads to realize profits at any cost. This may lead to inter-divisional rivalry leading to bitter fights. Each divisional head might be tempted to build his own empire at the cost of others. Problems of coordination and control may also arise when such ‘mini-companies’ or ‘little empires’ exist within an organisation.

  1. Cost:

Decentralization results in a duplication of staff effort. To be independent, each division should have access to purchasing, personnel, marketing and other specialists. As a result each division is expected to carry a large group of staff specialists at enormous cost.

  1. Some Disadvantages of Decentralization Relate to the Profit-Centre Concept:
    Often capable and competent individuals may not be available to run the divisionalised organizations.

4 Freedom of action may lead to diversity of decisions. Many a time the remote control from headquarters may prove to be ineffective as the enterprise grows.

5 decentralization demands training programmes that may be time-consuming and highly expensive.

> Advantages of Centralized System

  1. Easy to physically secure. It is easy to secure and service the server and client nodes by virtue of their location
    Smooth and elegant personal experience – A client has a dedicated system which he uses(for example, a personal computer) and the company has a similar system which can be modified to suit custom needs
    Dedicated resources (memory, CPU cores, etc)

2 More cost efficient for systems upto a certain limit
As the central systems take less funds to set up,

3 they have an edge when small systems have to be built
Quick updates are possible –

4 Only one machine to update.
Easy detachment of a node from the system.

5 Just remove the connection of the client node from the server and voila! Node detached.

> Disadvantages of Centralized System –

1 Highly dependent on the network connectivity

2 System can fail if the nodes lose connectivity as there is only one central node.

3 No graceful degradation of system – abrupt failure of the entire system

4 Less possibility of data backup. If the server node fails and there is no backup, you lose the data straight away

5 Difficult server maintenance –
There is only one server node and due to availability reasons, it is inefficien

> Answer to question 4

  • Management Centralized organizational structures rely on one individual to make decisions and provide direction for the company. Small businesses often use this structure since the owner is responsible for the company’s business operations.

  • Decentralized organizational structures often have several individuals responsible for making business decisions and running the business. Decentralized organizations rely on a team environment at different levels in the business. Individuals at each level in the business may have some autonomy to make business decisions.

Structural Advantages of Centralized Organizations
Centralized organizations can be extremely efficient regarding business decisions. Business owners typically develop the company’s mission and vision, and set objectives for managers and employees to follow when achieving these goals.

Use of Expertise in Decentralized Organizations
Decentralized organizations utilize individuals with a variety of expertise and knowledge for running various business operations. A broad-based management team helps to ensure the company has knowledgeable directors or managers to handle various types of business situations.

Structural Disadvantages of Centralized Organizations
Centralized organizations can suffer from the negative effects of several layers of bureaucracy. These businesses often have multiple management layers stretching from the owner down to frontline operations. Business owners responsible for making every decision in the company may require more time to accomplish these tasks, which can result in sluggish business operations.

Structural Disadvantages of Decentralized Organizations
Decentralized organizations can struggle with multiple individuals having different opinions on a particular business decision. As such, these businesses can face difficulties trying to get everyone on the same page when making decisions.

Answer to question 5


> blockchain is the way the data is structured. A blockchain collects information together in groups, also known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are chained onto the previously filled block, forming a chain of data known as the “blockchain.” All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.


A database structures its data into tables whereas a blockchain, like its name implies, structures its data into chunks (blocks) that are chained together. This makes it so that all blockchains are databases but not all databases are blockchains. This system also inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled it is set in stone and becomes a part of this timeline. Each block in the chain is given an exact timestamp when it is added to the chain.

For the purpose of understanding blockchain, it is instructive to view it in the context of how it has been implemented by Bitcoin. Like a database, Bitcoin needs a collection of computers to store its blockchain. For Bitcoin, this blockchain is just a specific type of database that stores every Bitcoin transaction ever made. In Bitcoin’s case, and unlike most databases, these computers are not all under one roof, and each computer or group of computers is operated by a unique individual or group of individuals.

Imagine that a company owns a server comprised of 10,000 computers with a database holding all of its client's account information. This company has a warehouse containing all of these computers under one roof and has full control of each of these computers and all the information contained within them. Similarly, Bitcoin consists of thousands of computers, but each computer or group of computers that hold its blockchain is in a different geographic location and they are all operated by separate individuals or groups of people. These computers that makeup Bitcoin network are called nodes.

In this model, Bitcoin’s blockchain is used in a decentralized way.

Thanks professor.