Queestion 1.

source

---

Decentralization.

---

source

---

Decentralization is a system where power is given to the people to manage their own affairs. Basically, each individual has the free will to make his own decisions for his or her development.

An example of a decentralized system is the steemit platform where each user has the ability to make his own transactions, power up and down, among others. Rewards and tokens are given to users to better the platform. A decentralized system has no one owner since each and everyone in the system has some kind of ownership.

A decentralized system runs on strict security where each account has value and as such is very difficult or nearly impossible to hack.

Centralization.

---

source

---

Centralization is a system where power is vested to an individual or specific group of people. These individuals run the system and are makes decisions for everyone.

A centralized system has a high risk of causing problems since the owner can close down the system at anytime leaving the rest of the members to fend for themselves.

Centralized systems report to the owner or a delegated individual and as such has a clear chain of command. This kind of system favours mostly small kind of businessess.

Question 2.

Comparison between centralization and Decentralization systems.

Hierarchy;

Hierarchy is a mode of authority or a system of leadership.

In decentralized systems, there is no identified owner or there's no one owner but rather everybody in the system has some kind of authority right from the lower level.

In centralized systems, there's an established owner or group of owners who everyone follows. In this system, there's a risk of unfairness since some people can be corrupt.

The decentralized blockchain system has the better form of hierarchy as all users are tapped into the blockchain network where in the centralized system like Facebook which have their data controlled by the identified authority can have it shut down at inappropriate times causing harm.

Reliability and security;

There's no doubt that we are all worried about security before we join a platform or venture into something new. We are worried of getting our information leaked and sold out that we sometimes miss clear cut opportunities.

In a decentralized system there is high security. Cryptography are used to ensure data is secure. There's usage of several servers in this system and as a result, users are not affected if there's a problem with one server. Security is even more tighter with addition of new computers or machines for computing. A user in a decentralized system has all his data and as such is not compromised unless by his or her own carelessness. This is a very reliable system.

In a centralized system, a user is at high risk of being exploited, hacked or compromised. Users in this system have their data on one server and as such a failure in a server or computer, causes damages and data loses to users. Data of users can be edited or even wiped since the established owners have access to the servers.
Looking at this, the decentralized system is more reliable and secure than the centralized system.

Usage;

The usage or the ability to understand the usage of platforms influences our choice im platform usage and as such gives some an edge over others.

It is easy to understand and use a centralized system compared to a decentralized system.
An example of this is using social media platforms like Facebook and YouTube. Using Facebook is easy because you just post, share, like and commemt on people's stuffs. These have simple tools that help in achieving all these things. But using a decentralized system like steemit which is based on blockchain is not easy. It requires deep understanding because without it a user would have no value for it. Because of this, achievement tasks are available for new users to better understand the platform. It's easy to retrieve lost or forgotten passwords in centralised systems as the process usually not stressful. Passwords or more preferably keys on decentralized systems if forgotten or lost are not retrievable. This is because the user's account has value.

Capital or finance;

In decentralized systems, costs is very high. To make everything and communication automatic on the blockchain system, it requires the setting up of several servers involving the use of several computers. Costs in centralized systems is lower than that in decentralized systems because things are often planned and budgeted on and extra cost is used only when truly necessary. The extra cost is usually to expand the network.
Therefore, it's easier to finance in centralised systems than in decentralized systems.

Question 3.

Advantages and disadvantages of centralized and decentralized systems.

Centralized systems;

Advantages:

a. Because of the established leader or owner, there's a chain of command and as such everyone knows who to report to. There's follow of a plan and decisions are usually taken in unism especially when it needs to be executed quickly. This system encourages hard and good work as people are rewarded through promotions.
b. There's reduced costs in centralized systems. This is due to the fact that plans are often made and budgeted for so extra costs is only incurred when absolutely necessary. There's no need to hire specialists to take care of things since decisions of importance are at the head offices.
c. Because there's supervision of the works of the users by their superiors, there's improved work in centralized systems. Since users answer to higher authorities, there's reduced lazy work and shoddy work.
d. There's reduced crime in centralized systems. This is because there's no anonymity and as a result users cannot always get away with crime since they can be traced with their details provided.
e. All users in the centralized system follow the same managerial plan. Structures have been put in place in this system to communicate plans of the system to the employees.

Disadvantages;

a. The centralized system is not secure and reliable. The data of users is often compromised and can be edited or erased by the owners or lost when there is a damage since it's on one server. It's vulnerability has been proven after it has been hacked already.
b. Because of the lack of involvment of all users in decision making, the non involved sometimes get infuriated and annoyed with some of the decisions taken.
c. There's delays in work in the centralized system as records of previous works and approvals for pending works must be sent to and fro from head offices. Employees only do what they are told when they are told to do it.
d. Another disadvantage of this system is that executives are under pressure to bring out new ideas because of their inability to allow others to bring their ideas on board. These top-level members sometimes aren't able to adequately supervise their implementation and as such make the low level members lazy.
e. The centralized system allows people to bring out their negative attitudes. With the way this system is structured, it gives way to inequity as people are sometimes treated differently from others for relation reasons, among others.

Decentralized system;

Advantages;

a. Decentralized system is reliable and secure. This system is based on blockchain and uses cryptography to secure data. Data is not controlled by someone or the owner and as such cannot be edited or erased.
b.Decentralized system helps promote anonymity. Not everyone wants to avail him/herself on social media platforms and as such this suites those people perfectly.
c. Decentralized system promotes quick decision making. Every individual or user is entitled to his own decision and hence this facilitates decision making.
d. This system reliefs top level executives. It reliefs them in the sense that they don't have to carry the burden of bringing new ideas to the table as the low level executives also bring a lot to the table.
e. Promotion of growth is another advantage of decentralization system. This allows various department heads to work well and compete with one another. This leads to increased productivity.

Disadvantages;

a. One disadvantage of the decentralization system is that it does not promote uniform policies. Unlike in the centralization system where everyone a managerial policy, the same is not achieved as there's no managerial policy to be followed.
b. Rise and fall in the price of cryptocurrency have resulted in price instability this system.
c. The cost in decentralization system is very high as it takes a lot to set up to achieve communication and security.
d. Co ordination in the decentralization system is difficult. Other top level managers are sometimes not up to task which can cause conflicts.
e. It's not possible to recover your passwords or preferably your keys in a decentralized system like the steemit blockchain.

Question 4.

Which is better for trading.

After listing and explaining the disadvantages and advantages of both the centralized and decentralized system in my answers above, I would say the decentralized system is better for trading or business although in some they're both better in some aspects.
This is because, not only does the user or employee make his or her own decisions, he doesn't have to succumb to the dictatorship of anybody.
Also, this system is very secure as compared to the centralized system.
Although it's not the most used now, I think it would be most accepted in the future.
I choose this system because one does not need to wait for others before arriving at a solution that would help the business.

Question 5.

How to know if a blockchain is decentralized or centralized.

I would like to use the same procedure our professor used.

Step 1:
Go to Google search then type https://etherscan.io/.

Step 2:

Look for the search button and paste the token u want to check. I am using bitcoin token (elastic).

Step 3:
Click on contract and check on contract source code (solidity) in coding area if u see it.

Step 4:

In the coding area, you can see any information about blockchain, so here is one point that if u see it means it's centralized. So I will show if my search contract is decentralized or centralized.
You will search in the coding function destruct only administration , self destruct, if you see type of wording in any coding area about any token, it means this token is not fully centralized.

Elastic Bitcoin looks decentralized because I did not find these word codings.

Conclusion:

This was a very informative homework because I learnt about centralized and decentralized systems, their advantages and disadvantages, how to know if a code is centralized or decentralized, among others. I would like to say a big thank you to @yousafharoonkhan for the lecture.