Hello my friends of my steemit crypto academy. I'm Ashutosh Kumar from Sirsasaganj, India and I'm on steemit with the username @ashubaba01. I'm here to post my fourth homework post for beginners task on this community. I posted my previous 3 tasks and thanks to professor @yousafharoonkhan to explain the task in simple language that one can understand easily.
Professor gives three question and one can answer only one. So, I decided to answer the second question.
These questions are as followed.
Question:-
Define decentralization. Describe the advantages and disadvantages of a decentralized system. In what areas of life can a decentralized blockchain be helpful?
DECENTRALIZATION
DECENTRALIZATION
Before knowing decentralization, it is necessary to know centralization, so first we know some important things about centralization.
Centralization:-
Centralization refers to the process in which any work is centralized to the leader of this organization. In a centralized organization, all major decision making powers are with the head quarter. And all the small offices receive commands from the head quarter itself. All those big decision-making officers belonged to the head quarters.
The best example for centralization are the banks, in which the big decisions always come from the RBI or the big bank head quarters and the number of branches across the country, follow those instructions.
Decentralization:-
As the name of decentralization is, so is its meaning. In fact, decentralization is the opposite of centralization, that is, it does the exact opposite of centralization.
Decentralized networks are made by computers and we also know them by the name of nodes. Which of course work on the basis of Peer to peer(P2P) without any third party interfering. In a decentralized system, information is provided to each and every node. A copy of the recorded data is found in every node. Decentralized systems can also distribute data so that any secret information can be validated without any third party interference. The network also includes a few more computers in which the data is validated by a system. The beta would be permanently marked on the independent blockchain before it was validated.
Each node in a decentralized network works independently of each other. It does not follow any rule of centralized system. Decentralized notes are linked to each other by following their own common rules. And it can do this by maintaining its ownership and privacy. Once the data is stored in the blockchain, it is then shared with nodes making it impossible to change and all data is recorded in the ledger. To change the data in the decentralized system, most nodes will have to replace the spoofed information with a smaller nodes. You will have to adopt otherwise that information will be rejected.
CHARACTERISTICS OF A DECENTRALIZED SYSTEM
CHARACTERISTICS OF A DECENTRALIZED SYSTEM
There are several characteristics about decentralized system. some of them below.
- All notes are independent from each other. Because of this everyone has different clocks and they run. Then everyone follows.
- There is more than one central unit so that the connection between notes is maintained.
- It does not work on one type of policy as everyone can able to take their own decision.
- Each of its members is responsible for his own decision.
So let's go ahead and talk about another reported topic called Decentralized Exchange [DEX].
DECENTRALIZED EXCHANGE [DEX]
DECENTRALIZED EXCHANGE [DEX]
It is to be noted that Blockchain technology is made of decentralized system and works on the same. It simply means that any person will be responsible for his decision and his activities. No other person can interfere between each other.
In Blockchain Technology, if any person sends his/her tokens to any wrong account then those tokens cannot be brought back as there is no provision of reverse process in Blockchain Technology. This is the reason why every user of blockchain technology is advised to carefully conduct their transactions.
Another thing in decentralized system is DEX, the full form of this is Decentralized Exchange.
DEX is a cryptocurrency exchange market where coins are exchanged for other coins. It does not work on centralized system, it is completely different from that.
Altogether there are many decentralized exchanges present in the present time. Here I share some in screenshot of DEX below.
Source of all four screenshots as shown above
DIFFERENCES BETWEEN A CENTRALIZED AND A DECENTRALIZED SYSTEM
DIFFERENCES BETWEEN A CENTRALIZED AND A DECENTRALIZED SYSTEM
| Centralized System | Decentralized System |
|---|---|
| It is controlled by single unit or headquarter. | It is not controlled by any single unit. |
| It's decisions made by the headquarters. | Everyone can take their own decisions. |
| Existence of formal communication in it. | Any type of communication held in it. |
| In this system money transfered to wrong address can reverse | In this system money can not reverse when transfered to any wrong address. |
| In this system decision making process is slow | Quick decision making process in this system. |
| People follow the rules made from headquarter. | No one follow the rules of headquarter. |
Now we will discuss about the advantages and disadvantages of decentralized system.
ADVANTAGES OF A DECENTRALIZED SYSTEM
ADVANTAGES OF A DECENTRALIZED SYSTEM
When a technology is centralized, it simply means that it is being controlled by a company or government. And on the other hand, decentralized technology is not run by any one individual, and no one person can control it.
Similarly, decentralized technology has some advantages which are given below.
The decentralized system is more reliable than the centralized system:-
As we trust the work of the company or any government by investing both our information and money. But some social media companies sell our information to some advertisers. For money and be it they keep an eye on our information. It's not good. On the other hand, in a well-designed decentralized system, we can take a decision that we do not share information with third parties.less chance of failure:-
In the decentralized network, the entire network does not get spoiled due to the fall or loss of any note in the decentralized network. No matter how many consumers fluctuateless censorship:-
It becomes very difficult to censor any traffic in a peer to peer network. Any communication in this outbound message is connected to the decentralized peer system.SECURITY:-
The security of any decentralized system is its most important thing. Because its security is of high standard, so no person can hack it.DISPERSION OF POWER:-
And the second most important thing about it is that no one person is bigger than another. Because it works on the quality of the members.
DISADVANTAGES OF A DECENTRALIZED SYSTEM
DISADVANTAGES OF A DECENTRALIZED SYSTEM
Now as we know that everything has some advantages and some disadvantages. Similarly, Decentralized has some advantages that we discussed on it. Now we will also discuss some disadvantages as given below.
- Completely loss of money or tokens if money is transferred to a wrong account.
- Well this lack of information, because everyone gets involved in every activity. that is the problem.
- Absence of civilized banner in any member's activity.
After discussing some good and some bad things about it, now is the time to discuss the needs of effort that it can have in our life.
AREAS OF LIFE WHERE A DECENTRALIZED BLOCKCHAIN CAN BE HELPFUL
AREAS OF LIFE WHERE A DECENTRALIZED BLOCKCHAIN CAN BE HELPFUL
A decentralized blockchain can be of great use in our lives. Many uses can be mixed because it is considered a symptom of the future.
EDUCATION:-
Which in today's era is used in everything inside education. Technology and everything, because money is being used for everything. Similarly, coins will also be used in the future. That is why it is very important to use discourse in education.BANKS:-
Many people in this world still live in pain because of this because their bank account gets faked. It will be needed a lot in the future. Because decentralized systems are a bit difficult to hack.Hope banks also start adopting it.
CONCLUSION
CONCLUSION
Thanks to the professor @yousafharoonkhan who gave such a good lecture and explained very well. I thank you very much that I have understood very well in such simple language. And I hope that in future also I will get a chance to learn more from the promising professor.
It is hoped that in the times to come, the use of blockchain will reduce the limits of corruption and emerge a better world.