Crypto Academy Week 9 - Homework Post for [ @yousafharoonkhan ].. Centralized and decentralised systems.
Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.
source
As seen in this image, in centralized structure, there is a point in centre on which all other are dependent while in decentralized system there is no central authority, all entities have individual existance.
Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.
Centralized system
Decentralized system.
Write five Advantages and five Disadvantages of decentralized and centralized system.
Advantages of decentralized system
Traders have absolute control over their assets.
Decentralized system is run on blockchaain, and by now we all are aware about security of blockchain. So assets are more secure as there is complex cryptographic system of verification of transactioms before being recorded on blockchain.
Decentralized systems are more transparent. As blockchain is a public ledger , the recorded transactions are immutable and noneditable. The public address of transaction can be viewed by all. Therefore it makes decentralized system more transparent and accountable.
P2P Global transaction are executed spontaneously and there is no bar on transaction amount.
Transaction fee on decentralized system are lesser as compared to centralized systems especially on international transactions.
Disadvantages of decentralized system.
Anonymous nature of transaction makes assets vulnerable to use in illegal transaction like drug abuse, human trafficking etc.
We are all aware of price volatility of cryptoassets . Some users look at it as disadvantage while other who believe in hodling can took advantage of it and earn huge benefits
As blockchain system is run on computers, GPUs etc. The cost of the hardware used to operate such systems ia high.
Environmental hazards are posed by hardware that is put to use in decentralized systems like huge energy consumption, carbon emissions etc.
No one to make claim about any problem you face like wild price swing, hacking etc.
Advantages of centralized system.
There is central authority to issue orders and the workers working down the chain abide and implement the ordere quickly. In case of any problem faced, you can complain it to the controlling authority and get it solved.
As there is no user anonymity in centralized systems, abuse potential of assets is less.
Cost of maintaining assets is much lesser.
No significant environment hazards unlike decentralized system.
No need to bother about price fluctuation because there is central reserve to control inflation and deflation.
Disadvantages of centralized system.
When compared with decentralized system, security breeches are common here.
User data is editable at the central level without customer consent. So transparency and accountability is weaker than decentralized systems.
Favouritism is seen in centralized system, so merit is sometimes kept at back in such system.
Central authority has every right over your assets. User rights and wishes are sometimes suppressed when they contradict with administrators.
Quality of services delivered in centralized systems is poorer than decentralized.
Which one is better for Business/trading and why? (write in own words)
How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.
- Step 1
Go to etherscan official website that is: https://etherscan.io/
and you got to see the following interface
- Step 2
In the address bar provided, enter the the token address which you are interested to check. I want to check wavesdex with
Wavesdex contract address
0x1cF4592ebfFd730c7dc92c1bdFFDfc3B9EfCf29a
And saw following details:
- Step 3
Click on contract and see details like
in coding you will search in the coding function destruct only administration,self destruct , if you see this type of wording in coding area about any token,, its mean this system is not fully centralised .
Source
As nothing like that is seen in coding area, it means WavesDex is a decentralized platform.
First respected student Thank you very much for taking participate in Steemit Crypto Academy Season 2, Week 1 course class..
in last question you did not provide wavesDex contract address that you used to find out the coding,
thank you very much for taking participate in the class
Ratting :8
Oh yeah, skipped in hurry. Now included.
Thanks for reviewing sir.
That is a very informative post. You really worked hard man.
Thank you.