Steemit Crypto Academy Season 2, Week 1 || Decentralized and Centralized System, Advantages & Disadvantages and which one is best for business? By @deeni1 for @yousafharoonkhan

Hi everyone, As-salaam alaikum,

I am much grateful to be part of the Crypto Academy Community. This is actually my first time here and I enjoyed the beautiful lecture delivered to us by Professor @yousafharoonkhan on how Decentralized and Centralized systems operate. Thank you so much prof for the good lecture.
Below is my completed assignment of the homework given by Professor @yousafharoonkhan


The concept of Decentralization refers to a form of institutional structure where the lower levels of management is given power by top management to work to ensure the smooth running and operation of the institution. In a decentralized organizational structure, business decisions are made by a lot of individuals to run the business activities. It relies on team management at various levels in the business. Each individual may have some autonomy to make business decisions.

On the other hand, Centralization is an institutional structure where power invested in a central location where decisions are taken, and the central body gives directives to their subordinates. Centralization is usually associated with the small-scale institutions without adequate finance and resources. The centralized institutional structure depends on a particular individual make informed decisions and as well give directives to the institution.


In decentralization, the burden of accountability is shared at various level. While centralization ensures full leadership and coordination of activities in all aspects.

Decentralization ensures better decision-making because decisions taken are closer to the actions. While in centralization decision-making delays as a result of the concentration of powers in the hands of one person.
Decentralization is suitable for large-sized organizations or institutions. On the other hand, centralization is best for small-scale institutions.

Decentralization ensures adequate supervision and control over an institution. While there is less supervision in a centralized organization


Advantages of the Decentralized system

The decentralized network or system provides and ensures open development. This is realized in nature and the way it works. The system attracts tools, products, and services to build on through the open development environment it provides. Simply put decentralization ensures and facilitates diversification.

Decentralized institutions make use of people with a wide range of skills and expertise for running a range of operations. A big management team provides the organization with knowledgeable directors who take care of various kinds of situations.

Also, in decentralized institutions, the burden that would be faced by high-rank executives in doing various tasks is reduced. They may simply delegate some activities to their subordinates and focus on the major functions of the organization.

Moreover, decentralization promotes motivation as both the executive board and subordinates come together to make decisions sometimes. This makes employees put much effort into their activities to achieve the objectives of the company.

Furthermore, proper supervision and control are made possible under the decentralized system. This because subordinates have the power to make independent decisions at the lower levels. This provides them the needed knowledge of each function under their watch and they are in a better position to take corrective actions and make amendments.

Disadvantages of the Decentralized system

Firstly, decentralization requires the hiring of skillful and trained experts to man the various divisions of the company. This very costly and poses a lot of financial burden to the company.

Moreover, several managers work under decentralization, and each manager functions and makes policies in accordance with his skills or expertise. This does not create room for uniform policies to be followed.

Also, decentralization causes disagreement or conflicts between managers. This is because it forces the various managers to realize profits at all costs.

Decentralization makes coordination difficult as a result of the divided nature of power throughout the organization.
Finally, decentralization requires technical expertise to be able to operate effectively at all costs.

Advantages of Centralization

The centralized system facilitates and aids focused foresight in its operations. Effective leadership is characterized by good vision and this makes various divisions of the institution focused on a particular agenda.

Again, in this system decision-making becomes easy as fewer of people are involved in discussing and deciding on needed actions to be taken. This makes communication in this system much easier compared to the decentralized system.

Also, there is the existence of laid-out roles for employees in this system. When this is done, employees become more productive and make independent decisions within the sphere of work.

Moreover, the centralized system prevents internal conflicts which may be common under the decentralized system. This is because decision-making is in the hands of one individual or a small number of individuals.

Furthermore, the centralized system ensures control and accountability in its operations. Top managers within the system keep each other on their toes to work to the fullest because of accountability existence.

Disadvantages of Centralization

The running of business activities is slowed down under the centralized system. Because decisions are taken by an individual, his absence brings a lot of operations to a standstill. For instance, everything has to be approved by the manager which slows down activities.

Also, because an individual takes decisions alone, specialization comes to its lowest curb. The system does not create room for specialization as the individual may not be a specialist in every aspect of the company.

Again, the system kills individual initiative as decision-making and implementation is vested in one person. Subordinates do not make suggestions. They just receive instructions or directives from the manager.

Moreover, there is an over-burden of work on individuals as more responsibilities are given to few people under the centralized system. The manager focuses on major administrative works delegates daily or routine works to the subordinates.

Finally, there is a distance relationship between customers and management under the centralized system. Customers do not have direct contact with decision and policymakers. They could only get to meet the subordinates who do not make policies. This is not the case under the decentralized system.


Both Decentralization and Centralization are good for businesses and trade depending on the type of business to undertake. However, in the long run, each business structure aspires to grow and expand and this calls for a decentralized system. Therefore in my opinion, I will choose the decentralized system as the best system for businesses. This is because when a business grows it becomes more complex and this calls for more responsibility and authority. Top executives will need to delegate some responsibility to their subordinates to facilitate effective operation. Again, as the business could have several units as a result of its expansion over a large area, decentralization becomes the best system to employ in order to ensure effective management. Decentralized firms make use of people with a wide range of knowledge and expertise for running several operations. This process ensures quality and improvement in productivity. No work or decision-making comes to stall under this system in the absence of an individual or the top-most manager. This is not common in centralized firms and surely does not augur well for business operations.


In determining if the blockchain is decentralized or centralized, I will do that by using the Etherscan method.
I took some screenshots to practically illustrate.
i used the Binance Smart blockchain.

Step one
Search for Etherscan on Google.

Step two
pasting of the token contact details

first (2).png


Step three
click on contract


Step four
check to see the contract source code (solidity)



Both centralization and decentralization are good systems depending on the type of organizational structure that company employs. However, I think decentralization is best because it contributes a lot in the blockchain technology.
It is good for effective running of business operations of companies because it delegates powers to several individuals to make decisions.

Comments 2

16.04.2021 23:59

You are welcome Professor. Am much grateful

17.04.2021 05:14