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What is decentralization?

In blockchain, decentralization refers to the switch of control and decision-making from a centralized body which could be an individual or a group of persons to an allotted network.

Decentralized networks attempt to decrease the degree of confidence that members have put on one another and deter their potential to exert authority or manipulate others in approaches that degrade the functionality of the network.

What is centralization?

Centralization simply means having full authority or control over data and functions of a platform. A typical example of a centralized system is facebook and Instagram where the company has full authority of the platform and controls are the visible features as well as who joins and who doesn’t.

Comparison between centralized and decentralized system

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Comparison	Centralized	decentralized
Third-party	there is third party involvement	there is none
Ultimate control	central authority	user
fees	expensive	cheap
ease of use	very easy to use	tactical and difficult to use
hackability	can be hacked easily	not easily hacked

Advantages of a decentralized system

• Offers a trustless environment, you don’t need to be conscious of the next person and everyone has the same precise identical information so if someone’s ledger is corrupted, it will be rejected by the contributors of the network.
• Limits factors of weak points which could have led to systemic failures.
• Users are in full power of their transactions and do not need and do not need a centralized authority to operate.
• There is little or no censorship and people get to interact directly.
• There is high level of data security especially from the use of cryptography.

Disadvantages of decentralized system

• It is relatively expensive to set up
• It is difficult to trace so in cases of crime, no one would be held responsible since everything is done in anonymity
• The system is very volatile and there are a lot of fluctuations in the market, take for instance, the fluctuations in the prices of BTC and other cryptocurrencies.

Advantages of a centralized system

• There is a clear cut, clearly defined command chain. In other words, we can say that hierarchy exists and everybody knows what to do and who to report to in case of arising issues.
• It is not very expensive because all the operations are planned out before executing.
• It is easy to make decisions because it involves fewer people

Disadvantage of a centralized system

• There is delay in work because the authorities have to make all the rules and are in full control
• It is not 100% trustable because it can be hacked
• Speaking of scalability, it can be very limiting since a single server is used.

Which system is better for business/trading and why?

For me, I would say that a decentralized system is better for business and trading. From my research, I’ve come to see that a decentralized system is not hackable and has less exchange fees which is a good thing. Although, it is tactical to use but with perseverance, it can be learned. More so, it gives the user ultimate control which is very needful and it is very secure as earlier stated.

How do you know if a blockchain is decentralized or not?

First, get and copy the contract address from coinmarketcap

Thereafter search on etherscan and paste it, then enter.

After that, click on contract and scroll down to see the codes written out.

When you access and study the codes, you can define if it is a centralized or decentralized project and for the sake of this work, it was a decentralized project.
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Thank you for reading through!

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