Crypto academy season 3 homework task 2 by professor @yousafharoonkhan
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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)
Define decentralization.
Before the inception of cryptocurrency, when blockchain decentralized system was not fully adopted centralized system was used where users' privacy control was solely monetized by a particular group of bodies, the only authority (High stakeholders) in an organization will be in charge of marking precise decisions that could be of users interest or against.
Decentralization tracing back to the introduction of bitcoin we began to experience a new era where everyone can decide on how some systems can operate decentralization allows users to be heard with no autonomy everyone's voice need to be heard.
So in general terms, decentralization is a system that allows users all over the globe to have a connection with different blockchain systems in nodes make it possible for its users to have control over their account without any third party interference in essence users on a decentralized system would have all their account managed under their watch without having a thought of getting a kick out of a system.
A typical example, suppose user A from Africa wants to transfer money to someone in Europe, using a decentralized blockchain system User A won't undergo much stress transferring to any users in Europe this simple process was made possible using a decentralized system.
On the other hand, if user A decides to use a centralized system such transaction process would undergo a rigorous process before it can be processed.
Aside from users having quick and easy access to making decisions on the decentralized system it is more scalable and fast when it comes to the execution of processing transactions in a very fast and cheaper way.
Describe the advantages and disadvantages of a decentralized system.
Advantages
Immutability; the ability for data or transactions to be unchanged or edited is an important feature of decentralization when information is stored in blockchain such data or information can't be tampered with.
Subordinate independent usage; decentralization allows, users, to make a proper decision on how they would go about managing their account for instance when a user creates a new wallet account it's his responsibility to safeguard all his phrase keys.
Scalability; decentralized blockchain makes it possible for another blockchain to interoperate using other alternative tools like Dapps which can be built-in blockchain to improve its scalability.
Decision Making; another unique feature in decentralization is when someone with a certain amount of token he/she can be able to make delegation on the system like approving transaction from other users known as delegated proof of stake.
Also, decentralization allows quick decision-making where agreement among users can be reached in a short time frame base on vote making.
Disadvantages
External factors; although decentralization has lots of advantages external threat has been a major factor government opposition limiting the growth and adoption of the system.
Transactions; some decentralized blockchain make it impossible for one to keep track of transactions happening on the system which has made it possible for money launderers to send and receive money without being tracked down.
User friendly; for one to dive into blockchain technology necessary knowledge and information must be required there are certain things a user must understand which means technical know-how is required to fully run a decentralized platform.
In what areas of life can a decentralized blockchain be helpful
Technology
Chain link is an interoperability blockchain that allows several smart contracts applications to be built on its system dapps like AAVE token and more are built this is simply an advanced technological growth that allows blockchain to be operated and run under a single entity in a nutshell blockchain decentralized system improve technology usage.
Automobile industries; blockchain technologies help eliminate counterfeit spare parts allow car leasing and sales.
Health sectors
With blockchain technology, data can be stored sequentially since blockchain databases can store a large amount of information it will be easier to record all patient's information in one chain.
Financial sections
Blockchain in the financial sector makes transaction processing time fast, cheap, and easy individual can make a transaction which can be processed in seconds also with the introduction of DeFi systems there are lots of passive income generating system built on blockchain technology.
Conclusion
Blockchain decentralized technology is here to stay I hope we take this ample opportunity and adopt the new technology in terms of use and scalability decentralization gives users a chance to manage all their account without any third party interference it gives room for other developers to build and grow interesting decentralized application on its blockchain.