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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)
Define decentralization
If you’re frequent internet users who keep exploring the internet then you won’t be unfamiliar with the term” decentralization”. However, the term is not limited to the internet only many companies are having decentralized systems or sub-departments in it but since we are doing a task for crypto academy let us focus on decentralization linked with the crypto world.
Decentralized in crypto is used as a technology utilized by cryptocurrency. We know there are no banks or government-sponsored offices or institutes that sell or monitor cryptocurrency but acquiring these virtual assets or selling them is an entire virtual concept.
This is what decentralization is. In simple words, decentralization is a technology that shifts the control from a centralized body to multiple individuals participating in that department.
For example bunch of students of the same class of some institute sponsor a trip for only students of their class nowhere in this outing there’s no authority responsible for their safety or there’s no authority limiting their fun but every student is on his responsibility and pays his expenses this is what decentralization is i.e. there’s no centralized authority managing or keeping a check on every activity of members of some organization.
The blockchain we come across in the crypto world is built on using decentralized technology being operated through smart contracts.
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One cannot skip mentioning centralization on talking about decentralization. To be clearer on decentralization we need to know what centralization is. It is a system being operated under the supervision or control of an intermediary which monitors all the processes being carried out on a centralized program or application or department for example our traditional banks, institutes, etc
Describe the advantages and disadvantages of a decentralized system.
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Advantages
It empowers users with complete control of the system.
The time taken for transactions is real quick.
The system facilitates transparency i.e. transactions details are made available for the public eye to keep access to it.
Since there’s no intermediary hence transactions can be carried out at a low price rate or fee.
Users can operate these platforms without submitting their confidential documents unlike processing KYC in centralized platforms.
They are hard to attack for hackers since they are decentralized i.e. the user is the only individual having access to assets.
Disadvantages
Major con of this decentralized system you don’t have any authority to complain in case of any mishaps or default in the system asking for a refund.
One who lost his private key loses his access to his assets which is close to impossible to recover till now which can cause loss of hold on one’s asset.
The transaction once made cannot be corrected or designed hence in case of making any mistakes one cannot do anything to undo it.
A single individual can create hurdles for the whole massive system.
Can be used for transferring money earned through criminal acts since there’s no government body keeping a check.
Generating a decentralized platform is pretty costly for developers.
In what areas of life can a decentralized blockchain be helpful? (Write in own words)
The first thing which came into my mind which I feel needs a decentralized atmosphere in our daily life elections should be carried out on such decentralized authority where users have full access and transparent results. Different people are opposing the election result in my state and many individuals are not satisfied with chosen one hence the decentralized voting system can provide users to have access to the voting system and also the transparency of the system can be ensured.
The world got familiar with online education in a recent pandemic situation which resulted in the development of many applications supporting such classes however I think the decentralized educational app can provide individuals an opportunity to show out their skills also the authenticity and purity of grades can be ensured in a world having education mafia running in it.
Social media is the place where I badly need decentralization we are aware with accounts being hacked these days and this can cause leakage of private data of users hence a system using decentralized technology is hard to hack and maintains user privacy as there’ no third part who hold all the personal data of the user.
he decentralized system can be used in medical-related areas of life too i.e. a patient's data can be recorded on decentralized technology keeping it between the doctor and patient hence can help the doctor to keep a check on his medical history and current changes in health.
CONCLUSION
Decentralization concept is getting popular with every second passing it can ensure users with maintaining their privacy and allows them entire control on the system. However, I see the decentralization concept as the future of the internet since no one wants platforms where there’s already someone monitoring your every activity. However, along with benefits, there are some flaws too which the developers are working on. I see decentralization in different departments in the life of the future however setting such technology can cost massive money to developers.
I see the concept of decentralization as the core of the success of virtual money like bitcoin and others. Users here enjoy a low cost of transaction since there’s no intermediary involved. Thank you professor for allowing us to dig more on this topic and I appreciate the efforts you made for the lecture hope I meet your requirements.
Thank you.
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