Blockchain, Decentralization, Block explorer-Steemit Crypto Academy Season 4 - Homework Post for Task 4
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)
In the time past, everything that is related to money/finance is being controlled by the government through most banks and other financial institutions. This has happened for a very long period and most people were seriously tired of the nature of the transaction. It was called the Centralization system, which can be defined as a system where all transactions, planning, decision-making of a body are being concentrated to a particular place or particular person. The Centralized system always has a physical location where you can go to perform your operations. The centralized system usually is made up of a third party through which all users, data, and other items must pass, and an amazing thing with these third parties is that they can restrict your transactions and so many other limitations. An example of a centralized system is the typical Banking system we have in the world today. So Far, the centralized system has been existing for a long now, what has been their impact for these numbers of years now which includes freezing of customers' accounting, censorship, you don’t fully control over your money, etc. And most times you can go to the bank to withdraw your own money, and you might be denied permission to collect your own money, after standing in a very long queue for several hours. Most times your transaction can linger for days before it will go through and you will be charged heavily for some transactions to go through. Another good example of the centralized system is the social media account, you can see that people’s account disappears for no reason, your data can be stolen that any given time or chance. And they can be banned from their platform anytime or day, these and so many more are issues people have been facing using the centralized system.
Because of these existing problems, A man named, Satoshi Nakamoto came into the scene to create a Bitcoin Blockchain that works on the opposite of the centralized system which is called the Decentralized system. This system uses a cryptocurrency which can also be known as a Digital Currency called Bitcoin. What is a Decentralized system and how does it work. Firstly, the Decentralization system was invented because of some failures that the centralized system failed to achieve. So it can be said to be the opposite of the centralized system. A decentralization system is a system, where the control, planning, and all the decision-making processes have been transferred from the centralized body which can be an individual, group of people, or an organization to a special distributed network. In a decentralization system, one of the aims of its formation is to remove all forms of third parties, gatekeepers, and intimidate bodies that tend to link you up with your money. In a Decentralized system, you don’t need permission from anybody before making a decision, and there is no censor. This makes it easier to be used by anyone, anywhere, and anytime. In a decentralization system, the power is transferred from the financial institutions to you. There is no center power but all the users are connected to the decentralized system. Satoshi Nakamoto Achieved a decentralized by the introduction of Blockchain that gives you full autonomy by taking away all the third parties and gatekeepers. The Blockchain application's sole aim is to make you in charge of your finance. There is a very high level of Security in the blockchain system. This is a typical example of the Decentralized system in the blockchain. In a decentralized system, the data are spread out to several network nodes in a different locations.
Describe the advantages and disadvantages of a decentralized system
- The first and major benefit of the Decentralized system, is that you are in full control of your money, you don’t need anybody’s permission before you make any transactions that you want to make. You are in charge, in full control
- The removal of the gatekeepers or the third parties makes it a whole much more interesting. You don’t need to stand in long queues before you can withdraw or deposit your funds
- Transactions can be done without limitation of your location, which means you can send and receive funds from one country to another country in a split second, without paying a huge amount of charge and the delay of reaching the person that you made the transaction with.
- Decentralized system has a very high level of the system that reduces every form of corruption and fraudulent activities. Transparency level is very high in the decentralization system.
- The information of all transaction are not stored in a central location, they are being copied by the blockchain, and have been spread across a network of computers.
- Transactions in a decentralized system are very fast when compared to the centralized system such as the banking institution.
- Because there is no limit to the number of funds that can be spent, someone without proper financial management can spend all his money in a split of a second, freedom sometimes needs limitation.
- Because your personal information is withheld, you can use your funds for crime and you can never be caught.
- In a decentralized system, your mistakes can never be corrected. If you mistakenly input the wrong address and send the funds, it can not be gotten back, because the receivers now have full control of the funds. It cannot be refunded to you. And you can not know who you sent it to.
- For you to operate the decentralized system, you need to be highly informed about the system, or you can make so many mistakes and you will regret it at last. So the need for you to be highly informed is very important and this might cost you something for you to learn, and so old people and very children cannot be part of the system.
- The cost to set up this system is very expensive. This can be a very high limiting factor.
In these areas below, the Decentralized blockchain can be used to ;
- Reducing Fraudulent activities while voting during an election. The United Nations brought out a new initiative that is called Followmyvote. This initiative provides an increase in the rate of transparency and decreases the number of frauds in voting during elections. It works solely on the Decentralized blockchain, it also reduces the election cost and also allows online voting that is very authentic.
- The decentralized blockchain is also used for the storage of public data. The Government of Estonia used it by working with Ericsson that enables a new center for the storage of databases. And this also manages the public data strongly. It was achieved by blockchain 2.0
- E-coinmerce has become the new world trading platform, this big e-commerce company uses the Decentralized blockchain, to protect their operations and also helps it to be more trusted by their customers. For example. E-coinmerce is an e-commerce platform that is based in Washington. E-coinmerce allows its customers to have their digital assets like brands, crypto, and stores.
- Decentralized Blockchain can also be used to properly Manage the patient database Accurately in the healthcare sector. This is achieved by breaking the central authority that allows you to store the patient data. When transferring the record of the patients from one hospital to another hospital, it becomes very easy and faster using the Decentralized Blockchain system. A good example is the MedRec, which is built by MIT. The MedRec is used in the healthcare industry, that ensure the data of a patient is accurate, confidential, and even authentic while sharing.
In conclusion, the decentralized system gives you full control over your funds and it has other useful benefits in real-life practice. This has given a cutting edge advantage over the centralized system, so with time, it can be widely used, because more innovations are being added up daily.