CRYPTO ACADEMY SEASON 3 BEGINNERS' COURSE - TASK 2: BLOCKCHAIN, DECENTRALIZATION, BLOCK EXPLORER
It's so good to be back on steem crypto academy. Thank you professor @yousafharoonkhan for this lesson. Below is my homework task. Please join me!
(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
A system can be centralized or decentralized according to the way management wants the operations to be like. While a centralized system leaves control and authority in the hands of a central control unit or top management, a decentralized system allows individual operators to retain control and decision making authority.
A blockchain is a decentralized network that keeps record of all transactions taking place in the system and granting operators access to full information on the block. Let's look at decentralization, its advantages and disadvantages as well as the area of relevance of such system.
DECENTRALIZATION
Decentralization is defined as a system whereby every individual user or operator in the system has authority of their own. It is a system in which authority is being delegated to smaller units of any organisation or system. In an organization, it may mean delegation of authority from top management to lower levels of management like the first line Management. In a cryptocurrency blockchain, decentralisation has to do with all the users in any system having control over all the operations.
ADVANTAGES OF DECENTRALIZATION.
It enables quick decision-making call: One important aspect of decentralization is that decision making is done faster and with ease.
Prevention of fraud: In a case of blockchain, decentralization allows easy detection of fraud and other abnormalities as all transactions that take place are recorded in an open-sourced blockchain.
Faster operation time: Without any involvement of a third party or broker, transactions and other operations are made faster than any other centralised system.
Improved supervision and control: Since all the people in the system has authority to operate and make decision independently, they have control over every operation under their supervision/care.
Decentralization promotes and facilitates diversification into new markets and new geographic areas.
It helps in handling emergencies that may occur in any organisational setting or any other system.
DISADVANTAGES OF DECENTRALIZATION
It is accompanied by increased cost as each individual or units operating in the system needs appropriate resources for efficient operation.
Conflicting interests: The conflict of interest often arise in a decentralized system as every unit works towards realisation of personal objectives.
Loss of control: As individuals retain too much authority, the central management may lose control over the entire operations of the system.
Authority may be abused or misused by the lower management.
Coordination may be ineffective and there may exist some lack of uniformities in the system.
SOME AREAS OF LIFE THAT DECENTRALIZED BLOCKCHAIN CAN BE HELPFUL.
In the health sector: In terms of an emergency or critical situation, a patient's data that is stored in a decentralized system can be accessed by several doctors from across different locations and solutions can be gotten with ease.
In the business sector, transactions can be stored and made available to everyone in an organisation, this way, there will be transparency and reduction of fraud.
In educational system: The data of all students can be stored and retrieved with ease and results will reflect actual performance.
In politics decentralisation will reduce fraud and other abnormalities during election and so on.
CONCLUSION
Decentralised blockchain helps in the delegation of authority from the central management to individuals and units in an organisational system. There as many areas in which decentralisation is useful such as business, education, politics, health, etc. Decentralization has so many advantages and at the same time there are some limitations to the system as discussed above.
Thank you so much for your time. I really appreciate!
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@yousafharoonkhan
Hello @senicbliss,
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I hope you understand. Thanks.
Alright.. thank you