Steemit Crypto Academy Season 4 Beginners' course - Task 4:Blockchain, Decentralization, Block explorer
Describe the advantages and disadvantages of a decentralized system.
In what areas of life can a decentralized blockchain be helpful? (write in own words)
Decentralized is a system that is not governed by any official body, they are networks that protect the identity of the user. A centralized system has your personal information while in a decentralized system information is secure and a user's identity is secured. A decentralized network operates on a peer to peer mechanism that allows user computers to interact directly, personal information can't be searched because the third party has no access to your information. It cuts out the middleman, and takes you directly to the client. It's basic qualities include that it is free, secure, and significantly cheap.
Decentralization as Applied to Blockchain
There three types of decentralization in blockchains, they include;
- * ARCHITECTURAL DECENTRALIZATION :deals with the number of computers running on a particular system. It runs on different computers interacting on one blockchain.
- * POLITICAL DECENTRALIZATION:Eg: Bitcoin, is run on a decentralized system because there isn't any head that sets the rules. It is also architectural decentralization because it is run on different computers on the same blockchain. It consigns how many individuals or organisations control the computers making up the architecture.
- * LOGIC DECENTRALIZATION:these when all the systems of a network have a single goal. For instance bitcoin isn't a logical decentralized run on a peer to peer network.
In blockchain the key features of decentralization include that, it's permission less, censorship resistant. This implies that anyone can use it, anywhere and at any time. It functions on a ledger that doesn't shut down and can't shut the user out. An ideal blockchain is not controlled by anyone, has no single point of failure and logical function in a system. They also resist cybercrime, and collision. Although bugs like geographical decentralization still exist, hardware centralization is still a risk even with the security of a proof of work system. Decentralization is difficult to classify.
Decentralization vs Centralization
In a Centralised system, information flows from the chain of hierarchy from the head to other people in the chain of command. It is governed by official bodies that mediate and control the content posted here. For instance if I post a video from my phone to Instagram, in their company they have a staff on stand by that would watch my video and check if that video complied with their terms and conditions. Even on opening and setting up any Instagram account the user is asked for personal information like Date of Birth, Personal Address and Location. This information can be utilised by the heads of these companies, because they have access to your personal information thus making you insecure. In Centralized blockchain exchanges they require personal information because they are run on Know your Customer (KYC) and Anti-money Laundering (AML). Centralized systems are prone to cybercrime and acts and they contain personal information. It is expensive to open and they are too complex for users to understand.
While Decentralization is a system built on the anonymity and security of the user. There is no body to sensor any content posted here, every user has their own freedom. They are run via a P2P system. For instance is the Steemit Blockchain, the blockchain has no access to the users wallet, the wallets can only be accessed by a unique set of private keys. Steemit can only caution a user for posting a content not according to their terms and conditions, they may also blacklist that very user. Examples of Decentralized platforms include eg: Bittorrent and Bitcoin. Decentralization is run on public key cryptography meaning only you and your recipients can view private messages. System breaches only affect one system in the decentralization platforms. Decentralized system can't be shutdown and will exist as long as the nodes in the system are still able to function.
Centralized systems maintain their network by censorship, deleting of accounts and blocking of accounts. This censorship discourages content creators from interacting with centralised platforms. Mining Pools are a typical example of Centralized system, in pools there is always some degree of fraudulent activity because some members of the pool may approve fraudulent activities. Eg of Centralized platforms include ; Instagram, Twitter and EOS. Most exchanges are Centralized. The Centralized platform has the personal data of many users, data breach leads to loss of people's personal information.
Describe the advantages and disadvantages of a decentralized system
Advantages & Disadvantages of Decentralization
|It secures the user's personal information and let the identity to remain private||The account is run by keys and loss of the keys will mean loss of the account|
|It is permission less and censorship resistant therefore anyone can use it||Scaling is an issue due to the increase in the number of users.|
|it is run on a blockchain/ P2P system||Modulation is a problem because it would be difficult to censor content, since the user is the only one that can access the account.|
|Even when part of the system fails, the system still continues to work||A decentralized system is expensive to maintain.|
|The system is run on Anonymity of users||The system is not user friendly and hard to understand|
|Dapps are more stable and easily accessible||Dapps may be slow to load and payments may take a while to process|
|An ideal blockchain is not controlled by anyone, has no single point of failure and logical function in a system.||Decentralized system are still new and integrating into society, therefore there are not fully fleshed platforms|
|They remove third parties and middlemen||Lack of awareness, there are not of developers that specialises in blockchain|
|They don't have too much downtime, overall they are fast and efficient||The decentralized system are immutable and non reversible|
|They take less fees for transactions||There is no service to take too incases of theft because of anonymity of users|
In what areas of life can a decentralized blockchain be helpful? (write in own words)
Blockchain can be confusing, and complex to understand leaving one to wonder how can this technology be used in the real world, a blockchain can be described as a distributed database that can be shared amongst nodes that are able to add new data to the blockchain, but cannot alter the contents of the blockchain.
Blockchain In Everyday Life
Blockchain can be used stop audiometer fraud, this may be described as tampering with the speedometer and making a new vehicle seem newer than it actually may be, if all the cars were registered on a blockchain, a buyer can simply go online and find the actual range of speedometer for any vehicle. The cars will be connected in a decentralized system that cannot be tampered by anybody. Over a hundred cars are being tested on this technology in Germany and Switzerland.
Electronic voting has its own issues, people fear that it could be tampered by hackers and physical voting is expensive. Blockchains can be used to cast and store votes, making it different to alter and tamper with. Some challenges will still be faced like allowing people's identity to be secure, viruses can tamper with the device, any system used must be able to maintain security.
Everyday people die of food borne disease because it's difficult to actually identify where the harm is coming from, thus making it difficult to isolate the problem. This problem can be solved by storing every food in a blockchain, that would be stored in a digital certificate that identifies where a piece of food has been. Therefore if contamination is detected the food can be traced back to the source and track how many people bought the food. Companies like Walmart and IBM are currently working on this kind of system.
Tracking Packages using Blockchain
A decentralized ledger that makes transportation of goods a lot more easier and efficient. This is being developed by IBM and MESEK shipping companies.
Smart Contracts can be used by insurance companies
These are contracts that function when certain conditions have been met, insurance companies can use smart contracts to validate claims and calculate risks.
Medical records could be stored on a blockchain that is only accessible to medical personnel.
It can be used by streaming platforms to identicate how many times a song has been listened to and pay the artist an exact equivalent of the plays.
With advancement in technology decentralized platforms can make our lives a whole lot easier but there are still significant problems with anonymity and theft. I have understood what decentralization means and I thank professor @yousafharoonkhan.