CRYPTO ACADEMY SEASON 3 BEGINNERS COURSE- HOMEWORK POST FOR PROF. @yousafharoonkhan TASK 2: BLOCKCHAIN, DECENTRALIZATION BY @preshymukel
Hello Steem World.
I'm happy to be part of the great lecture by @yousafharoonkhan on blockchain and decentralization.
Here's my entry
QUESTION 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 your own words)
INTRODUCTION
WHAT IS BLOCKCHAIN?
Blockchain is a type of system or database that records and stores information in blocks and these blocks are encrypted and then chained together chronologically. Informations stored in blockchain are impossible to be hacked, data on blockchain are immutable.
A blockchain is a digital ledger mostly used for transactions. When a new data comes in, it goes straight into a new block which is then chained to the former.
DEFINE DECENTRALIZATION
In blockchain network decentralization simply means the distribution of control power among the members of a particular network. In a decentralised system several governing bodies controls the system rather than one body.
In a decentralized system, individuals collectively make decisions that governs the system.
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Describe the advantages and disadvantages of a decentralized system
Advantages of a decentralized system
- Operating time: Unlike the local banking sectors which have specific time and days of operating, the decentralized blockchain is always open for operation at any given time, day and place.
- Low transaction fee: The transaction fee of a decentralized blockchain system is relatively low compared to the centralized system or even our local banking system. The reason for the low cost of transaction fee is due to the fact that a third party is not involved in a decentralized system transactions.
- Accuracy: In decentralized system transactions are validated by all the nodes in the system before they are approved, therefore it is almost impossible for mistakes to occur.
- Transparency: Transactions made on decentralized blockchain are made public, therefore people can view each other's transaction history though it can not be altered or hacked. This attribute of decentralized system makes it difficult for manipulations to set in.
- Security: Decentralized blockchain system is a very secured one because before a data is added to a block it undergoes series of verifications from all the nodes in the system, therefore before any form of alteration can take effect it has to go through all the nodes as well.
- Anonymity: Though the transaction history of users are made transparent for others to be able to view, identifying user's informations or personal information of a user who makes a transaction are not revealed even though their transaction histories are revealed.
- Trustless setting: Trusting other members in a decentralized blockchain is not necessary because informations on the system are disseminated among all the users.
Disadvantages of a decentralized system
- High maintenance Cost: The operation and maintenance of a decentralized system is very costly and as such will restrict some persons from going into it.
- Inefficient speed: Decentralized transactions are very low because all the nodes in the system verify transactions before they are approved, and this whole process takes time to be completed.
- Illegal activity: Because of the anonymous nature of decentralized system, some users may use it for illegal transactions.
- Complexity: Decentralized systems are very complex and requires skilled individuals to be able to operate it.
In what areas of life can a decentralized blockchain be helpful? (write in your own words)
1. Healthcare sector
Decentralized blockchain can be used in the healthcare sector to securely store patients' medical records. Since data's on decentralized blockchain can't be changed when approved, it will be helpful when used in the healthcare sector to keep data of patients' and also for ease assess. Inorder not to make patients' medical records public, private keys can be used to store these records on the blockchain so that only specific set of individuals are allowed to access it.
ii. Banking and Finance
Applying a decentralized blockchain system in the banking and finance sector will be really beneficial. A decentralized system operates at any place, time, and day regardless of weekends and holidays, therefore applying a decentralized system in the banking and finance sector will help customers to securely make transactions at any point in time, without any form of inconvenience going to the bank.
iii. Food Safety Sectors
Since decentralized blockchain data are immutable it can also be used in tracking the origin of food to the place of consumption, and the blockchain can easily alarm the mass if there's any form of food-born illnes and also trace the source.
iv. Personal data backup
Decentralized blockchain is the perfect platform to backup personal data as the system is a very secured one free from hackers.
v. Business
Decentralized blockchain can be helpful in business to keep records of commodities coming in and the ones been sold out of the business, thereby keeping track of the available good and the ones that needs restocking.
CONCLUSION
Decentralized blockchain system is an essential and a beneficial system and can be adopted and applied in the crypto world at large and in all areas of life such as business, health sector, companies, academic, etc.
I'll say it is wise for every sector to accept and apply the decentralized blackchain system inorder to enhance speed and ease in all areas of life.
Best regards @yousafharoonkhan
Thanks for reading through my post.