CRYPTO ACADEMY SEASON 3 BEGINNERS COURSE- HOMEWORK POST FOR PROFESSOR @yousafharoonkhan TASK 2: DECENTRALIZATION BY @meniya
Hello steemains
Happy to be back here @cryptoacademy world to learn more about crypto-world. Thanks @yousafharoonkhan for this interesting Introductory Lecture on blockchain and decentralization.
TITLE OF HOMEWORK: TASK 2 ; QUESTION 2
(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)
INTRODUCTION
WHAT IS BLOCKCHAIN?
Blockchain is a type of database that stores informations or data in blocks and are chained to together in a chronological manner. Blockchain serves as a digital decentralized ledger that stores data, duplicates and distribute them to all computer systems connected to the network. It uses a decentralized data system known as Distributed Ledger Technology (DLT), that is safe, immutable and easy for keeping records of transactions on the network.
Decentralization in blockchain is simply defined as the transfer of power or control of data and decision-making in a community or network system among members of that network rather than to a sole entity in the networksystem.
Which is to say, in decentralization a single entity doesn't have the power or control to make decision on his/her own but decision are take with a consensus among the members collectively.
With decentralization, each transactions records and data in a computer system in this network is transparent, secured and safe, as a data can never be altered. All transactions with decentralized system are irreversible. There are three kinds of decentralization, namely;
•Logical decentralization
•Architectural decentralization
•Political decentralization
▪︎ADVANTAGES
•Accuracy
Transactions with a decentralized blockchain is always verified and approved by many thousands of computers on the network. This is achieved by the collective effort of each member and is not left to a particular entity to avoid errors.
•Reduces weak points
Decentralization helps to reduce weak in systems where there may be too much dependence on specific entity, as any weak point in the network could lead to systemic failures and failure to provide expected services to all computer systems on the network.
•Security
With decentralization, transaction data are safe and secured, as it involves all computer systems on the network to verify the authenticity of each transaction, confirm it before it can be added to the chain of network database. Once a transaction is validated it is impossible to alter the data, as any attempt to do so will be noticed by other computers and safety measures are taken immediately.
•Transparency
A decentralized system provides a trustless environment for its user's. All transactions or decisions are made collectively by every entity and can be seen by every entity too, as each member have a copy of the extent data transferred in the form of a distributed ledger(DLT). Therefore all transactions are transparent and validated by every entity to prevent any form of manipulation.
•Low transaction fee
Transaction cost with a decentralized system is optimally low, as there is no third-party interference. This helps to reduce transaction costs in the network system.
•Improved data reconciliation
With decentralization, data transactions are easily transformed and stored in the database. As the data are transformed it is shared to every entity, with access to the real-time and shared view of the data transaction.
•Quick decisions
In a decentralized system, decisions are taken quickly by every entity and there is no third-party interference to consult before taking a decision. This makes it more efficient in making transactions.
▪︎DISADVANTAGES
•Maintenance Cost
The cost of building and maintaining a decentralized system is very expensive.
•Slow Transaction Time
Transaction time with decentralized system is relatively slow. Transactions occur per second, this is because all the nodes need to approve and validate a transaction, before transactions are confirmed, this leads to a slow transaction time.
•Requires skilled individuals
Decentralization requires individuals who are experienced and well- trained to operate, because it is quite complex to handle.
•Lack of Regulation
Because every entity has the power or control in the network, some individuals may choose to do as they like leading to insurbodination, as there is no third-party interference.
▪︎Banking and Finance sector
Integrating decentralized blockchain into the banking and finance sector helps to increase the speed of transactions. With a decentralized system here, transactions time in banks will be reduced and the banks will be able to operate even outside their working hours, as funds can be transferred with an online network quicker. Applying a decentralized system in banks also helps to mitigate frauds in banking sector.
▪︎Health Sector
The application of decentralized system in the Health Sector will be very beneficial, it will help for easy and safe storage of patients data. As data stored with this system can be accessed by any doctor. For instance if a doctor Annie attended to a patient on the 2nd of June 2020 and stores the patient's medical data on decentralized system, when the patient visits the clinic again and Doctor meniya is on duty, the medical data can be easily retrieved and accessed by doctor meniya. Indeed decentralized should keeps a patient's data safe, secured and private.
▪︎Political sector
This is one area of life that the application of decentralized system will do a whole lot of good, especially in countries with large population like my Country-Nigeria. Decentralized Blockchain will be very effective in the voting process of most countries. Using my Country-Nigeria as an example, DEX Blockchain will help to facilitate our electoral process, eliminating any and every form electoral fraud or manipulation before or after the elections, this is because once a person cast his/her vote, the vote us automatically counted and everyone has access to the voting process, making it very transparent for all. With this system in political sector there will authenticity of electoral results and the winner of an election will be announced immediately after the electoral process.
▪︎Personal Data storage
The use of a decentralized Blockchain in our personal life can be very helpful. One can store their personal information and data on the blockchain, and this will be kept safe and secure. If you misplace any of your document, you can easily refer back to your stored data on decentralized blockchain and retrieve them. All data stored on the blockchain is accurately verified and stored properly for life.
▪︎Business sector
The application of decentralized blockchain in a business will here in store keeping, that is storing and keeping records of every items brought into the store and sold out. Chain Suppliers can also utilize this application to store the originals of their products, this will help to verify the authenticity of products purchased by buyers.
Decentralization is indeed a welcomed blockchain technology in the world at large, which if fully adapted by all will make life easy and guaranteed security and transparency in everything you do with this Blockchain. Although, decentralized system is expensive to maintain and requires skilled person's to operate, it's transaction cost is low, and transaction are safe,transparent, and efficient. I can categorically say that decentralized blockchain has a bright future in the crypto world and other areas of life.