Crypto Academy Season 3 Beginners' course - Task 2: Blockchain, Decentralization, Block explorer by @warrior02
(2) Define decentralization. Advantages and disadvantages of decentralized system. Areas of life a decentralized blockchain can be of help? (write in own words)
Decentralization can be defined as the act of disbursing power and authority, power to make decision and give control to every member/units of an organization or company. The idea in a decentralized company is that all members have the equal rights to make decisions and have control.
In a decentralized company, there is no central entity or third party which rules/governs the other members, everybody in the company is equal and cannot be ordered by anybody.
Some characteristics of a decentralized company;
- There is no central-entity or third party interference.
- Every member of the company, is equal, each having the same power.
- The level of transparency is high.
- Every member has the full power to make decisions.
source
A blockchain is formed when old and new blocks used to store data is linked with a chain. A block is where data is stored in a network. All data stored on the blockchain is completely secure and cannot be tampered with or destroy.
In a decentralized blockchain network, users can store data from Various locations of the world using their computers(node). There is usually no central node that directs the affairs of others. All users are all to control all their stored data as they wish to without waiting for orders.
Describe the advantages and disadvantages of a decentralized system
There is no work load on the top executives, since everyone has power to make decisions.
In decentralized company there is no central entity/head that can be targeted as a weak point, making it difficult to run it down.
Members from different parts of the world can convinently access any data stored in a decentralized blockchain.
Transactions performed in a decentralized blockchain network is usually fast, because everyone makes their own decisions
The building and maintenance of a decentralized blockchain network is quite expensive, due to the heavy computer and computing resource needed.
There may be lack of coordination as all members are allowed to make decisions and do as they like.
There may be incompetency, as not every member will have the required know-how to make decisions on their own. And this may result to loss, due to delay in transaction.
There possibly wouldn't be any standard organogram, due to the large number of people working from different locations.
Areas of life a decentralized blockchain can be of help
Banking:
Using a decentralized blockchain network, funds can easily be transferred between people quickly. Rather going to stand in long bank ques as is usually the case in my country.
Business:
The transparent nature of the network, makes it suitable for a business. A business which utilizes a decentralized blockchain for transaction will scarcely encounter fraud, this is because all transactions made and how funds are used is recorded on the blockchain and everyone can see.
Election:
If a decentralized blockchain is employed during the conduction of elections, then there wouldn't be any openings for it to be rigged. Because the high transparency of the network will show correctly how many votes were cast and the data cannot be tampered with, else it would be detected by other nodes in the network.
Health:
Patients profile, and treatment data/analysis can be stored in a decentralized blockchain network. That way there wouldn't be any cases of loss and it would easily be accessed by both patient and doctors from any location.
Cc:
professor @yousafharoonkhan