(2) Define decentralization. Describe the advantages and disadvantages of a decentralized system. In what areas of life can a decentralized blockchain be helpful? (write in own words)
Decentralization is a secured way of interchanging data from me to you without an intermediary or third party interaction or interference leveraging on a peer-to-peer approach. From the lecture, the meaning of decentralization is not far-fetched owing to the fact that it literally means the delegation of autonomous leverage and ability away from a single authoritative or centralized unit or body. It is likened to the transfer of operational power from a central authority to subordinate groups.
From our objective, we are going to be relating decentralization to the cryptocurrency world in general and in this, we will be explosively relating the concept of decentralization to the cryptocurrency world. We cannot discuss decentralization without mentioning Blockchain which is a decentralized system of data interchange without the inclusion of a third party in transactional processes.
Decentralization reflects on the independence of P2P (Peer-To-Peer) blockchain transactions which are self-governed by the intending individuals. It is a self will system whereby individuals can dictate or control their transactional actions governed by the blockchain principle which involves a secured system of verified data exchanged between me and my fellow or between two individuals who have decided to transact or share basic data with one another.
The picture below was created by me on Corel Draw and it depicts an icon portraying the principle of decentralized finance
On a fair and descent note, I will be highlighting the major advantages and disadvantages of Decentralization.
Below are the Advantages of Decentralization.
- The first advantage of the Decentralization system is that every single person that is engaged in this system works in his or her own potential ability and thus, there is no room for deprivation or restriction of transactional activities by a central authority or an interference from a third party
- Another wonderful advantage of decentralization is that it is a key to transparency and credibility. This means in this system, there is room for all records of transactions being kept and recorded in blockchains with no individual alteration or customization by users. This is a major win for the technological world as the blockchain decentralized system will can be employed to solve numerous problems that requires the keeping of ambiguous and complex records which might cause imminent doubts or unclear conclusions in the long run. The decentralized system can help eliminate all of such as all records of data exchange is being kept within the blockchains.
- The decentralized system can be used for curbing criminal and unscrupulous acts either in a country's government system or in other organizations as all activities carried out are recorded on the blockchain.
- The efficiency of financial transactions gets a far better approach with the decentralized system as a tool which facilitates it. This means even transactions between people living in two different countries can be concluded in split seconds without the interference of a third part or a delay by a centralized unit.
- Data stored in the decentralized block is highly safeguarded and protected from hackers who intend to alter or change the part or whole of the records kept on the blockchains.
- Decentralized System allows people to independently take charge of their financial decisions in investing and trading at their own will and at their own risks.
- Initiating a decentralized system requires a massive recruitment of highly skilled personnel as the whole blockchain system is more than what an average lenient person can just delve into and hope to explore. Naive people might make irredeemable errors which may lead to permanent loss of funds to wrong wallet addresses whose owners cannot be ever found or fathomed.
- Because of the leverage of independence attributed to individuals using the decentralized system, it can also be misused by unscrupulous and mischievous individuals who tend to scam naive newbies in the crypto space by every means they can employ. Such crimes can really be done swiftly with the aid of the decentralized system which is swift in action and irreversible in transactional processes.
- People who are indecisive or slow in decision making can suffer or regret their unchecked misappropriation of previous decisions which may or can cause them to lose money as the decentralized blockchain transactional processes are irreversible.
If there be any way to eradicate election rigging and election results manipulation in my country, Nigeria, then decentralized blockchain is our only saving grace. A society that claims to be democratic directly act otherwise to this claims as corruption has eaten deep into the hearts of of the insincere government who seek to enrich themselves at the the expense of the poor citizens.
The Decentralized Blockchain can be helpful in authenticating genuine results by ascertaining the total number of voters who voted for the candidates of their choice with the decentralized blockchain system proving the results which cannot be altered or customized by anyone. This approach can foster the eradication of electoral malpractices in my country, Nigeria.
With the use of cryptocurrency growing like a wildfire in the harmattan, the decentralized blockchain system is silently becoming a major rival to the centralized banking system which is already posing a major threat to the banking sector in my country. However, sentiments aside, the decentralized blockchain system is well organized and can be referred to for accountable records of transactions which cannot be manipulated or customized by an intruder. Also the blockchain decentralized system is a faster approach to banking and finance sector as transactions here can be carried out in a twinkle of an eye.
The Centralized Blockchain system is capable of improving our healthcare system by helping us store accurate records of medical data, encoded and which can only be accessed by a product key. Records of surgeries can also be kept using decentralized system. We can use the decentralized blockchain system for medical profiling by bringing or linking up of patients with authorized and qualified doctors who can be able to assess the patient's health problems and either prescribe a solution or give a verdict on how to go about such an illness.
Administrative issues such as tax payment and records, land tenure systems and records, etc. can all be sorted out by the simple application of the centralized blockchain systems. We can achieve this when all recorded data stored in the blockchains are reviewed to get clarity or transparency on the grounds of ownership and payment proof validations.
While cloud systems can be hacked and altered by hackers, Data store by the Decentralized Blockchain System is immune to hacking and thus perfect for storing important data records in every organization we tend to use it for, including educational, banking, health, industries etc.
The essence of importance of the centralized blockchain system cannot be overemphasized as our day to day activities requires the use of the system in one way or the other so therefore, ignoring the importance of the system is a step backward that can make an entire society lag behind.
Also, it is important to note that for blockchain to work effectively, the nodes to nodes network needs to comply to work under collective ethical conditions or standards.
I really did learn a lot from this lecture and i am glad to have been born in this generation where blockchain is contending to be one of the greatest technological evolution to have occurred!.