Write the definition of decentralization and centralization in your own words. Explain these two systems in your own words
- Centralized: in a centralized system, all power is focused on a single regulatory entity, decisions are only made by authorities where they only listen to a select group with power, and their actions are focused on the well-being of that small group, the rules. and all the transit of that system is 100% regulated by those people and they decide that it has a hole in the system and that it should be expelled.
Therefore, this is the opposite of a decentralized system in all its words and actions in relation to a financial system, its action is through the client - server format, this means that all common users to be able to make transactions or interact have to connect directly to the server so that the transactions are executed and all this is registered on that server and that accounting record only those who have the power of decision are able to audit and review it as and as it suits them best.
- Decentralized: In this system everyone has the same power of decision, there is no regulatory entity that excludes people or makes directives against the community, and its development is organic, well structured, where its growth bases are focused on support mutual of the users, the code of this system is generally open and free to any modification or improvement of the community.
Transactions can be done from point to point, these are 100% auditable by anyone who belongs to the network, since each node works independently thus giving greater stability to the system, since any failure that any of these nodes could present It would be completely remedied by another that has a correct operation and the consent is faster, thus giving the opportunity to create transactions instantly, with a greater number of simultaneous operations achieving greater efficiency of the system in general.
Explain in your own words the difference between decentralization and centralization or compare both in your own words.
In the centralized system, a client-server system follows where the client has few administrative powers and the obligations it has to operate are limited, leaving all these attributions to the service server, which regulates each step they take and has total control of movements, something that does not happen in the decentralized system where everyone has the same administrative power and transactions have no limit between users.
A centralized system has high liquidity, since it has important private allies, something that does not happen with the decentralized system that its liquidity is low and of course there are times where this is not the case but they are rare.
Confidence is high in a decentralized system while in the centralized one it is not so since the centralized system runs on a single server and the decentralized one has hundreds of nodes where transactions are protected.
#List five advantages and five disadvantages of the decentralized and centralized system.
Centralized
advantage
High liquidity, this is one of the advantages that attracts the most attention since this gives security in the savings of its clients
It has a security system which makes it impossible to send funds to wrong people, how many times do we see transactions from people to wrong people in the decentralized system, and there is no entity that can return the money thanks to human error.
All users have the same authority, this is an advantage since each head is a world, many users with power can lead to an anarchy where all crazy things can happen only because a client with power wants it that way.
The decision is made by a high authority, this is an advantage on occasions because many people giving their opinions and giving their different points of view later make a consensus of the community.
Constant audits of companies registered for this purpose, this makes the operation of these systems more legal.
Disadvantages
Arbitrary decisions where the group of users do not agree.
High commissions, if these systems have high commissions nobody can do anything to change it, unless the owner decides that it should be regulated.
Closed code and personal information on a server where if it is hacked the losses are uncountable.
Little freedom of opinion on future improvements of the system.
There are users who are preferred by these owners and it depends on the amount invested in the platform.
Decentralized
Advantage
It is free and independent since no one can impose regulations or give guidelines that go against the community.
Low or non-existent commissions, this being one of the greatest advantages of this system.
It does not require personal data to have an account and interact in these systems.
High transfer limits, without schedules and without regulations.
High confidence of its users, since the information is saved in several servers called nodes.
Disadvantages
Possibility of losing funds if assets are sent to the wrong address.
Sometimes it is used for illicit operations
The volatility of prices means that today you have profits but tomorrow you lose.
The cost of this system is high, and few users venture to invest in it to keep the project alive.
Few people use it since the marketing campaigns are smaller.
Which one is better for Business/trading and why? (write in own words)
How to know if a chain of blocks is decentralized or not? You can describe any method, but in your own words.
in it we look for the etherscam page and there in its search we place the address of the transaction that we want to explore
then at that point as soon as we find the transaction we give it in the coding obcion,
being there we read the source code of the contract. To know if it is centralized after the word (Solidy) there is a point or mark means that it is a centralized contract, in this case we can see that it is not so.
One point to keep in mind in this part is that there are centralized contracts where you can not even see the source code since logically they have everything hidden.
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