Blockchain, Decentralization, Block explorer - Crypto Academy S5 - Homework Post for task 4 @young-boss
QUESTION 3
Define decentralization and describe the advantages and the disadvantages of a decentralized system. In what areas of life can a decentralized Blockchain be helpful.
Decentralization
Before beginning with my definition, I will first define the Decentralization based on the real life before relating it to real life.
In real life, we see decentralization to be a scenario in which we have a distribution of power from above to sub coordinators. With this decentralized system there is equal opinion among everyone. Let’s take an example of decentralization in a county. We see that in a decentralized system of a government, the power does not stay centralized. Not only the president does makes decisions, but each region can pass their laws.
Now relating decentralization to the Blockchain, we see that it is a great aspect which is used to transfer the control and decision making from central entity to distributed networks.
With this, we see that there is reduction in the amount of trust that could be entitled to a single individual and there is exertion of authority and control among each other which degrades the functionality of the network as well.
Advantages and Disadvantages of Decentralization.
Improving data reconciliation
The decentralized Blockchain has been known to improve data reconciliation as companies exchange data with other companies as well as partners. This is done by transforming and storing in each of the individuals data solis which is resurfaced each time it is needed to pass downstream.
Optimising Resource distribution
Decentralization is known to come about with the aspect of optimizing resource distribution. This is done particular so that promised services can be provided with a much better performance as well as consistency. This can in turn reduce catastrophic effect in the future.
Providing Trustless Environment
This aspect happens to be one of the most interesting aspect of the decentralization. This is because in the decentralized Blockchain there is the aspect of no need in trusting anyone in the system. This is done through the distributed ledger as each of the member has a copy of the data of others. In this is case, any altering of a ledger will be rejected by the other members in the network.
Increase transaction speed
With the decentralized Blockchain, we have increase transaction speed since there is the elimination of centralized authority for its validation.
The Aspect of volatility
There is always the warning given by most brokers as well exchanges saying cryptocurrency is subjected to high volatility which is quite risky for the market traders. With this, we that the Blockchain happens to be very volatile as prices fluctuates very high percentages in data which is very risky for investors in the decentralized Blockchain.
The Aspect of Criminality
With the anonymity nature of the decentralized Blockchain, we see that there is the usage of the decentralized Blockchain by criminals, hackers, scammers to dube others. This is one of the major disadvantgeof the decentralized Blockchain.
The Issue of Storage
Another aspect I will be briefing on is the aspect of storage issues. This means that with the storage of cryptocurrencies, users are required to at least have a level of tech skills to avoid mistakes and losses.
Decentralized Blockchain in Real Life
The decentralized blockchian can be used in so many aspect of life which include Non-Fungible Token Market, music royalties tracking, health, cross border payments, personal identity securities, supply chain and logistics tracking, real time operating system and others.
Health
Beginning with the health industry, the health industry uses the aspect of the decentralized Blockchain particularly to effectively reference the data of patients to doctors, phamacists as well as hospitals.
Another aspect is the patients data can be secured properly with the usage of the decentralized Blockchain. As it has the ability to keep incorruptible transparent and decentralized logs.
Politics
This is aspect happens to be one of the newly introduced in the application of Blockchain in real life.
Some government uses smart contracts in the implication of the running of the government through the securing of data.
We also have casting of votes. We have always known of the numerous frauds involved in the usage of centralized systems especially when it comes to casting of votes. With the introduction of the decentralized system this can be done through distributed ledger and being corruption free which is an important aspect in the application of the decentralized Blockchain in real life.
Education
The Blockchain is used in the aspect of education when it comes to securing students records. This is also applied in the verifying of students credentials as the decentralized Blockchain happens to have as one its major advantage the aspect of speedm as it eliminates overhead associations and streamline verification which comes with corruptions at times.
Banking System
The banking system apply the decentralized Blockchain in its function through the securing of the users information. The banking system is known for its very huge transactions carried out and is does secured from hackers through the application of the decentralized Blockchain as it happens to be very secure.
Conclusion
Decentralized Blockchain is a great aspect which is used to transfer the control and decision making from central entity to distributed networks.
It has numerous advantages such as its transaction speed, its security and many others and one if its major disadvantages being the usage of its anonymous nature by hackers to scam others.
In real life we can apply the decentralized Blockchain in the health industry, Politics, Education, Banking system among others.