Hello everyone here!
(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)
Define decentralization.
Decentralization is a system in which power is not been delegated from a central authority or actions of an institution or body relies on the order of a central government. In this system of operation every department or institution has the power to make their own decision and carry on actions on their own way.
In relating this to our context of study, users on the blockchain has an equal rights and power to deliver manage their own transactions of assets independently without seeking for central approval or against restriction of the central government.
It observed that, the central system of government are tied upon to a central unit in which orders are passed to those under and in such situation, when there is an emergency in which quick decision is necessary, hence it will definitely delayed because several channels has to be passed before it get to the main authority.
In the crypto blockchain network, the decentralize forms makes it easier individual users to send, share and also make transactions freely from any interference from central management. With this, assets owners trade and manage their assets anytime that they thinks it favors them. They can resist any business when there are fluctuations in the market and are not in their favor due to the decentralized power.
One of the idea of Bitcoin by Satoshi Nakamoto was to make an online money which is an alternative of a fiat currency to move away from the central banking system and their problems.
For instance, in the banking system, management are been centralized and users cannot make any quick decision when necessary, so if there is an unforeseen circumstance which needs quick attention hence it will automatically affect the whole institution because no individual has the right to deliver any decision from his own conscience.
But on the decentralized blockchain, users have power to make their own decision and the system is well secured and encrypted from any fraudulent behaviors and actions from other users. With the concept of cryptography, decentralized blockchain is well secured in which information can be communicated to another and only the intended recipient has the ability to access it which ensure its security and protection from fraud.
Describe the advantages and disadvantages of a decentralized system
Decentralization has a lot of advantages which can be seen from the explanation above but above all that, there are some challenges with it which results in its disadvantages.
The table below shows the advantages and disadvantages of decentralization.
| ADVANTAGES | DISADVANTAGES |
|---|---|
| The security is well enforced and free from central authority orders or actions | Since information cannot be view or access by any central authority, terrorist can use it as their communication channel to cause attacks and disturbances |
| Transactions are quick and faster without any third party permission | Wrong transactions cannot be reverse in case of misplaced sender or receiver |
| Every user has an equal right to make his decision or order for his management | This may create an atmosphere for bad actions such as bad marketing such as drug dealing and others |
| Decision making is fast and quick | Some decision is maybe incompetent |
| There is an atmosphere for a diverse creativity and interventions | Some interventions maybe be dangerous and threatening |
| There is proper care in dealing with transactions since wrong transactions cannot be reverse | |
| The system is transparent and reliable | |
| No third party can change information or hacked another work |
In what areas of life can a decentralized blockchain be helpful?
Banking Sector
It is observed that, the management of the banking sector is centralized, this implies that the actions are been delegated from a central authority and with this kind system in case of wrong decision make or incompetent decision made by the authority will affect the fund of millions of investors and this is dangerous.
But if they adapt the decentralized system, every user or investor will have an absolute security over his funds and will know how manage his investment decision and more so any wrong this decision will affect him alone and not others. Also, the decentralized system will make banking transaction quick and faster and well secured.
Health Sector
The decentralized system is very good at the health sector, the system as it is make it such a way that every patient has his own information folder and records of the patient is kept there this make it well organize for doctors to process their diagnosis procedures.
The system keeps the secret of patients and also make it easier for doctors to have precedent information to apply to new patients. The adoption of the decentralization in the health sector will help secure transformational health care since doctors can passed medication to patient even at a far distance in another country.
Real Estate Sector
With this aspect, landed property issues has always been a problem across many countries, with the adoption of the decentralized system, all the landed properties will be digitalized and it make provisions to show the number of acquired properties, available properties, how to register with a genuine documents, all the necessary court proceedings for conveyancing and all the necessary information available.
With this, investors will find it easy to invest and also go through all the necessary procedure and at high level of security.
CONCLUSION
The concept of decentralization system has contributed a lot in the world transformation in areas of creativity and also enforced security with people assets. From the topic, the merits of decentralization is quite clear to be more than the demerits, this shows how important it is in the world today.
Many areas or sectors in life requires it to make a smooth transition of the standard of living of people in areas of Health, Banking Sector and the Real Estate aspect.
I really leant new knowledge from this lecture and I gave much regard to professor @yousafharoonkhan.