Thanks @yousafharoonkhan for the lecture I really appreciate most especially how you simplified the lecture.
Question no 1 :
Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.
Centralisation and Decentralisation
Any blockchain must possess one of this system. Therefore below I will explain about each of the system.
Decentralisation as the name implies is the system whereby business, company and other organizations are being controlled and managed by different bodies just to achieve a greater and common goal. Decentralisation always involves many people that's to say that the authority is not given by only one person. In decentralization system the decision making is done by each individual and each of the individual has the power to contribute for the success of the system.
Therefore, the success of any Blockchain is contributed by each of the individual since the power and decision making is controlled by each individual. However, this simple means that all the units in this system plays a vital roles since there is freedom of expression, transfer of power from the top to bottom and decision making. As such each unit is observed important in decentralization system.
Further explanation; A Blockchain that operates as decentralised body, possess high rate of longevity as it is characterized by freedom of expression, decision making is done by each individual, and there is no limitations of power in this system.
In simply words, decentralisation is not controlled and managed by single individual or owner where decision making and authority is been empowered only by the individual. Every individual in decentralized system has it's own independent decision. Although this decision must be a positive one that will develop and makes the blockchain to grow. Hence, decentralised blockchain run with an independent system where each branch seems to be playing a central role which is the exquisite of the system. Good example of the decentralized system is BTC.
Centralization in other hand is the opposite of decentralisation. Hence, in a centralized system, the decision making and authority are enforced only by those in higher authorities. That's is to say that only the higher authorities make decisions. The characteristics of decentralisation, this system works against them as it's being run and controlled by single owner.
The rules regulations, and decision of this system is centered on those on top as such not everyone in the system are empowered. I think in this system that's not like freedom of expression because those on top has a greater influence to make decisions on how the system will run and as such may not last longer because if anything happens to those in higher authorities is will alter the growth of the system.
Therefore I can say that Centralized systems are systems that is controlled and managed by central servers where other client/server are directly connected to it. Example of the Centralised system is bank.
Question no 2 :
Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.
Difference between Decentralization and Centralisation
Below are the difference and comparison of the both system:
|decentralisation is not controlled and managed by single individual or owner where decision making and authority is been empowered only by the individual. Every individual in decentralized system has it's own independent decision||Centralized systems are systems that is controlled and managed by central servers where other client or server are directly connected to it. Example of the Centralised system is bank.|
|Example: bitcoin||Example: bank|
|The security is very high||the data can be leaked or hacked which means the security is less|
|The exchange fee of Decentralization is very low||Exchange fees of Centralised system is very high|
|It is very easy to use and does not anonymous users||it's very hard to use and only requires savvy people and it offers users anonymous|
Question no 3 :
Write five Advantages and five Disadvantages of decentralized and centralized system.
Advantages of Decentralization
The followings are the advantages of Decentralization.
1.Save time and Relieves top executives from burden
In decentralized system, the top executives does not perform or execute all the various functions in the system. Since in the system other units has the freedom of expression and decision making as such this will relieve the top executives. This is one of the beauty of the system not in Centralised system where the top executives and it's immediate units perform all the responsibility.
Just as mentioned earlier that it relieves stress on the top executives, decentralized system also saves time to those in higher authorities. Each units in decentralized system is very vital and the subordinates has the power in decision making. Due to this effect, the top executives burden are lessened and save some time in doing duties which has been taking care by other units. Therefore the top executives concentrate on other vital managerial duties which will help in the development of the system.
There is high security in decentralized system which makes the funds of the users to safe from the hackers. Users always prefer system that has higher security before investing. Therefore any users that needs system with high security should work with decentralized system. No chance of hacking in decentralized system only when the user expose it's password and keys.
3. Transfer of power elevate motivation and confidence
Another beauty of the system is that there's transfer of power from the top to the bottom which makes the system more effective. Each units has power in making decisions that will develop the system. Since each units in the system has the authority in decision making process, this will develop and elevate their morale and confidence. Involving in decision making to enable the system to move forward makes individual to think and as such can improve confidence.
4. it promote better control and supervision:
In decentralized system, the lowest levels are empowered with authority to make decision independently and with this it enhances better control and supervision. With this effect, they have the ideas on each of their assignments given to them under their supervision and there is also room to make corrections when needed.
5. Fast in decision making
In Decentralization, making decisions is very fast as its comes from each units. Quick decision making is among the beauty of Decentralization. With this, problems are solved very fast because each of the units are thoroughly working on how to make the system to work effectively. To work under decentralized system, the individual must work very hard and this also makes the system to develop.
Disadvantages of Decentralization
To everything that have advantages must have disadvantages as well. I have mentioned some the advantages of it and below is the disadvantages.
1. Price Fluctuations
Concentrating on the cryptocurrencies just like the bitcoins, there is no constant price of it and fluctuations of the price leads to a very problem in decentralization. Therefore, since it is unpredictable it is a problem.
It's very expensive to practice and it requires more people with great minds to execute it. The system is very costly.
3. It leads to crime
Decentralized Blockchain deals with cryptocurrencies. Cryptocurrency depend on Blockchain and currently the currency has been preferred by the criminals as a mixed of financial exchange. Transfer of funds in decentralized system remains one of the problem. Since the user is in control of the server it tend to increase crime which may as well affect the governance of the place. With this some placed has been banned to deposit and withdraw like Nigeria.
4. Storage problem
Decentralized Blockchain is just like a databases. Earlier, I mentioned that blockchain deal with cryptocurrencies and not everyone is educated about the currency and storing the details about it only requires those that's savvy and understand. Sometimes that's issues about transferring cryptocurrencies like bitcoin from wallet to another cold wallet. I could remembered when I started digital currency, I wanted to transfer a coin to my brother's wallet and I don't know much about it and I was scared because from what he told me that when you mistakenly send to another that I can't trace. So this is a big problem that's preventing some person to join.
5. Very difficult to use
Due it's nature of Decentralization, it's very difficult to use expect for those that has knowledge about it. People want to invest on something they know about and some thing that they can use. Not everybody can create or sign up on it and the market is not stable. This is a problem.
Advantages of Centralisation
Here is the advantages of Centralisation:
1. Implementation of decision is very fast
Only the top executives has every right to make decisions and it's decision must be followed by the subordinates as such implementation of decision are very fast. The Centralised system has few people and when the top executives implement a change, it will be carried out within a minute
2. It is very easy to use
Centralised system tend to be easy to operate. Although, it has been there for long and known by people so it's very easy to use because they are convalescent it.
3. Well Organized and delegation is very easy
Organisation that operates Centralisation, they know and understand their roles. That's in the organisation, every worker or units know s their function and knows their supervision should in case of any report. Delegation of work is very easy as the top executives always delegate work to the bottom (subordinates) worker and monitor them to finish the work properly.
4. Cost reduction
The beauty of Centralisation is that the cost associated is reduced compared to Decentralization. Cost associated with any Centralized organisation is very less.
5. Elimination of wrong transfer of funds
It eliminates transfer of funds to the wrong people since is not the user that control it.
Disadvantages of Centralisation
The followings are the disadvantages of Centralised system.
1. not secure
The security of Centralised system is not that strong which is a big problem and it's prone to leak data and as well to hack.
2. Single point of failure is very high
Since the system depend on the top executive and once the top executive have an issue that he can not handle which can bring down the organisation as such it can lead to failure. There is high rate of failing because is been controlled and managed by single individual and his immediate group.
The system is full controlled by single owner and it's security is not that strong so people may not trust it because of the fear that their data may be leaked or hacked.
4. Since the subordinates that's the lower users does not have freedom of expression and power to make decisions which will lead to frustration and it's a big problem because sometimes they might provide reasonable ideas that will develop the system.
5. Not every of the users in Centralised system are treated equally. The system prefer other people which may lead to hatred.
Question no 4 :
Which one is better for Business/trading and why? (write in own words)
I think the both has amazing benefits and as well has it's bad side. In business/trading I will go for Decentralization because is something I can trust since it has good security and my data can be secure. Also, I does not involve third party and it require only the user alone to control it. I think before engaging in any business that are things to required to be considered; and I think one is trust and security which I mentioned earlier and how long will it last. One thing that I like in decentralized system is that there is no single point of failure, not in Centralised system where the the single owner may make decisions that are not accepted which can alter the business. You are in full control of the business you know when to sell and buy. But my problem is the volatility.
Everyone want to have asset to their business and prefer business that will last as well. However, decentralized system is has that attributes and possess the tendency to grow in future. So soon various organizations and companies will identify the benefits of it which will make it to grow rapidly.
Question no 5 :
How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.
Below is the steps used to know if chain link token is decentralized or Centralized
- To get the token visit and after which you can check from the steps below if it's Centralized or decentralized.
- Click on the link or you can type it in your web browser
- The image below will show then click on chain link token( link)
- Click on contract token
- Click on contract
- Then stroll and check through the coding to if you will see coding function destruct only administration or self destruct
Chain link token looks like decentralised blockchain since I didn't find these coding(coding function destruct only administration or self destruct)
Based on observation, the transaction of fund in decentralization is transparent and the information is not stored in a central location. Everyone want to have asset to their business and prefer business that will last as well. However, decentralized system is has that attributes and possess the tendency to grow in future. So soon various organizations and companies will identify the benefits of it which will make it to grow rapidly.
To understand the benefit of Centralised and decentralized Blockchain is very vital. To identify if a particular Blockchain is Centralized or decentralized is very important because it will able you to know the one to invest on after understand the two terms.