[Blockchain, Decentralization, Block explorer] - Steemit Crypto Academy Season 5 - Homework Post for Task 4
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Source - https://www.canva.com
(2) Define decentralization. Describe the advantages and disadvantages of a decentralized system. In what areas of life can a decentralized blockchain be helpful? (write in own words)
- WHAT IS DECENTRALIZATION
Decentralization is a kind of system in which third parties do not intervene and each participating author is responsible for managing their resources. Also, the Decentralized System is not governed by any central body. Therefore, we don't need to provide our sensitive details for joining with a Decentralized system.
As an example, we can introduce Dfinity's Internet Computer Protocol. It is an Internet Computer in which there is no higher authority, each one is autonomous from his work, there are no hierarchies between them. Everyone is responsible for what they do and is free to exercise their work without expecting approval or disapproval from any authority.
Source - https://sfmagazine.com
When we talk about Decentralization systems, we can not forget Blockchain technology. That is a huge system that works as a Decentralized system. In Blockchain technology, each member of the blockchain is responsible for its content, has freedom of creation, and is not governed by a higher authority. Despite not relying on a central entity, the data handled here is protected by Cryptography.
- DIFFERENCE BETWEEN DEX AND CEX.
| DECENTRALIZATION | CENTRALIZATION |
|---|---|
| Immediate decisions can be made ourselves. | Decision-making directly depend on someone's approval |
| The information comes from all the persons involved. | The information flows from the top to the bottom |
| All people have control and authority | The authority resides in a central unit or person. |
| Higher Security for our data as it's totally decentralized | Can't expect higher Security as it's centralized. |
| Anyone can join with the decentralized system without providing our sensitive data | Only for selected persons who qualified for the system and it may request our sensitive data |
Source - https://keydifferences.com
- ADVANTAGES OF A DECENTRALIZED SYSTEM
It allows each user or person to be autonomous, freedom of expression is allowed, there is no censorship, and everything that is handled itself.
It allows greater and better management of resources. Also, most elements are not dominated by a single authority.
It allows for immediate decision-making because we don't need to wait for approval from a lead body.
In a decentralized system, we can remain anonymous without revealing personal data. The only thing is working on it with our public and private key. Also, no one can get access to our Private key.
The most important thing is Its resistance to failures. If there is a failure in part of the system, it will continue to work as there are many more elements in the blockchain to continue other works.
- DISADVANTAGES OF A DECENTRALIZED SYSTEM
In the absence of authority, there may be an inappropriate use of the system because it does not have rules established by a central point.
When we make a transaction, we need to be more careful since there is not any system or person to recover them.
As there are no specified rules, the quality of the content can be a little bit low as compared to a centralized system that is conducted by a leader.
There can be multiple criteria around the same situation which makes it more difficult to make good decisions.
Controllability can be low in relation to certain aspects due to the large volume of people who live in the system.
Source - https://www.oodlestechnologies.com
- FOR SECURITY SYSTEMS
These days there is large-scale corruption in the security systems. Actually, those persons who have a lot of money or power can handle whole the security system in their hands by controlling relevant persons who respond to the security of any system. That's why we can recommend using a blockchain for saving all the important information on global security. Also, it will make it possible to regain trust in these bodies in one way or another as a decentralized system can't be handled by one person.
- FOR PAYMENT SYSTEMS
These days when we make a transaction, unlike a centralized system, we can have our money at all times. Both the recipient and the sender do not need to have an account with a bank or in the same country. Actually, it is a system that allows us to make and receive payments worldwide without any extra cost. As long as we use our private keys correctly, everything will be fine as it is quite secure.
- FOR HEALTHCARE SYSTEMS
At present, all the relevant information of any patient will be stored in some private hospital's database. However, storing a patient's medical history in a blockchain makes it easier for those who need more information about surgery to analyze the information stored there and make the right decisions at any time, no matter where they are.
- FOR EDUCATION SYSTEMS
Some students do not have access to the same education because of financial difficulties. This system allows education to be self-governing, allowing students to excel in certain areas as well as participate more actively in this learning process. They have access to all their academic records and all facilities.
- FOR POLITICAL SYSTEMS
As a Decentralized system is a transparent system, we can vote, discuss laws and make suggestions through this system. In a centralized system that guarantees democracy and transparency, there will be no problems of fraud or conspiracy as has sometimes happened. Therefore, we can express our vote safely and peacefully.