Steemit Crypto Academy Season 2, Week 1 || Decentralized and Centralized system , Advantages & Disadvantages and which one is best for business?
I am @yousafharoonkhan, your crypto professor and I am from Pakistan. And this is my first class this week.
And in the first class of this week we will talk about decentralization system and Centralization system in very simple words and in this class I will talk about the advantages and disadvantages of these two systems, comparison and which system is better for business.
Hope you like my first class . So before the class starting I am very grateful to the steemit team for giving me the opportunity to work here as a crypto professor. I am very grateful to the steemit team.
Let's begin our First class week 1.
We will try to understand Decentralization in very simple words. Decentralization is about authority. And Decentralization is the system in which each individual has the power to make decisions in their own right. Power and decision-making is not controlled by a single individual or organisation or group, but every individual involved in this blockchain and system has the power of decision-making and thus each unit is considered important in a Decentralization system.
Now, if I were to define a decentrlized system in my own words, I would say, "A system in which everyone has decision-making, freedom of expression and the transfer of power from top to bottom. Such a blockchain or system is called a decentrslized system."
We can also say that a system or blockchain system in which every person in the community has freedom of speech and authority.Well, my students, when we hear that this project or this or that project or website is decentralized, it means that everyone will be empowered in this project and no individual or system will have the decision making power in any matter.
To put it simply, decentralized does not have a single owner of any company or system, but all the individuals and communities that are connected to this blockchain. And everyone is independent in their decisions.
A decentralized blockchain is a modern system that will last as long as a computer system exists. Because in this block chain, computers from all over the world are connected to each other and a decentralized system is running with an independent system.
Now I will try to explain to you in simple words what is Centralization. So in a centralized system, the authority and decisions are vested only in the higher authorities. This system is connected to a center and all the rules, decisions are with an individual or a group. Not all individuals or entities connected to a centralized system are empowered. In short, a centralized system works against a decentralized system.
It means that the opposite of decentralized is centralized and the opposite of centralized is decentralized. We say that "organizational structure in which decission making is connected at the top." Means all decisions are in the hands of the top authority.Centralized systems are systems that use client/server architecture where one or more client nodes are directly connected to a central server
If we compare decentralized and centralized, it becomes clear from the detailed definitions above that there is a big difference between the two systems. As you and I know about cryptocurrency and we trade cryptocurrency on the exchange. They are mostly centralized and the user's funds are in control of the exchange in a centralized blockchain. While in decentralized blockchain system the user controls his own funds. In this way, decentralized systems can only be anonymous and you can fund and run your business through a decentralized blockchain without even identifying yourself. Whereas in a centralized system the user has to identify himself and then he can enter the system only with the permission of the higher authority.
If we talk about the administration of a decentralized system, it is clear that decentralized is the strongest and most reliable blockchain system. Because the decentralized blockchain is not owned by a single individual but all the users from all corners of the world who are connected to the decentralized blockchain network are running the decentralized system. If the centralized system operators can shut down their network whenever they want and the user may be harmed. While a decentralized blockchain, if truly decentralized, can do no harm.
Centralized is easy to use while Decentralized is not easy to use. Centralized has high liquidity while Decentralized has low liquidity.
Dear students, if we talk about finance, then "Decentralized finance is an experimental form of peer to peer finance running on cryptocurrency blockchain. And students always remember that decentralized system runs on blockchain. Says that can never be hacked while the centralized system has been hacked hundreds of times in the world.
Dear students also remember that the record of a decentralized system is not kept in one place because this data is stored on the server on which blockchain is stored in many servers which are connected through blockchain system. And it is impossible to change or edit the data, while in a centralized system, powerful people who have access to the main server can edit the data whenever they want. So this is also a big difference between the two systems.
If we talk about scaleabilty, it is high in decentralized and low in centralized.
Realability is high in decentralized and low in centralized because decentralized is working with hundreds of servers while centralized has only one server which if it goes down then the whole system is down while decentralized is not one server
In decentralized, the transfer of power takes place to a lower level.
If a company is operating on a large scale and wants to see its customers and workers prosperous and empowered at the grassroots level, then a decentralized blockchain connected network is very useful.
Decentralized funds are safe and the chances of system hacking are zero percent.
light burden on top management it is also advantages of this system
in decenttralized blockchian user or customer relation increase
In a decentralized blockchain, the skills of people from different parts of the world are also improving as people from around the world are connected to an integrated system. A decentralized blockchain builds confidence in us.
Decentralized blockchain increases Greater participation in Governance. It also creates better coordination.
It also improves the efficiency in service provision. Because it increases the customer's self-confidence and enthusiasm for work.
If I tell you the benefits of Decentralized in a short words , it is one that makes everyone work from self-confidence, and from top level to lower level, and since this is the beauty of this system, everyone involved in their affairs Is independent. And he works hard in a decentralized system. And everyone has equal opportunities to develop.
Data is stored in a decentralized blockchain and no one can edit it. The center of the decentralized system is the user. In a decentralized blockchain, the user is anonymous. Decentralized systems are safe in every way.
Disadvantages of this area
The biggest disadvantage of decentralized is that it can lead to an increase in crime as the transfer of funds can lead to problems. Also, if we look at cryptocurrency, price fluctuations have not kept prices stable in a decentralized system. And volatility also adds to the disadvantages of a decentralized system.The cost of the system is very high.
Having a command in a centralized system makes reporting easier. In a centralized system, decisions of the same command are followed, thus getting rid of many powerful people. Centralized financing can eliminate the transfer of funds to the wrong people. Every user working under a centralized system has the same vision that the top authority chooses. In a centralized system, the decisions of the top authority are given priority. Such decisions are implemented quickly. In addition, since every user has to answer to one authority, every user tries to improve his performance.
Disadvantages of this area
The security system of the centralized system is weakened and hackers succeed in hacking. The centralized system does not include the lower level user and user in decision making and decision making which creates an atmosphere of frustration.In this system user's data can be edited which is a demerit of this system. Some users are preferred in this system which explains the unfair behaviour of this system. It has also been observed that not all users are treated equally in this system. Because the system operates under an authority, the element of fraud is more prevalent.
My dear students, in the above lecture I have tried to explain to you the Decentralied and Centralized system and now we will see which of these systems is better for business with the above discussion in mind. If we look at both the systems there are some flaws and some advantages and thus we have to look at the nature of our business before starting a business. Because everyone wants to make a profit from their capital, we must first look at the merits of these two systems, and we must also look at the nature of our business and the time frame work. Because some people join the system for short term and some for long term.
And I think for any business to succeed, we have to adopt both types of school of thought and sometimes we have to prioritize one system according to the circumstances, so the two systems sometimes become inseparable. And sometimes one has to be preferred.
Thus, if we want to do business under a decentralized system, we must also look at whether I have the ability or the ability to make timely decisions that are necessary for the success of a business under this system. And so if we move towards a centralized system, we also have to look at our capabilities and business there and the centralized system under which we are doing business, to see how effective that system is for your business. Decide which system is best for the business and why.
If a person is doing business in a centralized system and powerful people make decisions that are not acceptable to you or can harm your business. In such a centralized system we have to follow the decisions of the top authority. If at some point the top authority changes its rules and regulations and harms your business, then I also look at long term and short term frame work on a priority basis in business and here in the lecturer I am focusing on the same again and again. Am Decentralized in this way you have to go with all the ideas and theories and even if it is possible that the rules you have created will not help you, then while adopting any system, we have to keep in mind the nature of the business and time frame work and our capabilities. ۔ You have to discuss this topic in detail in the given homework.
Dear students we often hear some blockchain claim that their blockchain cryptocurrency is decentralized but after a while it is found out that blockchain was not decentralized and this company lied to its customers then how can we know if there is a blockchain or Whether cryptocurrency is decentralized or not, I share a little bit of information .
Go to google page then type https://etherscan.io/
after opening the given site ,then look at the below screen shot and paste company token contact address.
Step 3: now i am going to check VRGold (VRG) blockchain that it is decentralized is or not
now i will paste the VRGold (VRG) token cotract address that is "0xB6F09f221d7a93390235d427c72fFFC4F3856a9F"
step 4; now click on Contract
step 5; now check Contract Source Code (Solidity) below in coding, area if you see
in coding area you can see every detail about blockchain,, so here is one points if you see then its mean it is centralized so i show you that my search contract is decentralized or centralized
in coding you will search in the coding function destruct only administration,self destruct , if you see this type of wording in coding area about any token,, its mean this system is not fully centralised . so it was easy way to check the any token that it is decentralised or not.
VRGold (VRG) token look decentralised because in coding i did not find these coding .
My dear students, this is the first week's course and I hope you all like today's class. And I have tried to put this subject in front of you in simple words instead of complicated words. I hope you have understood the course. And you can let me know in the comments how you like my class today so that I can prepare my lecture in the next class using the easy teaching method for you. thanks so much.
Home Work Week 1
Question no 1 :
Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.
Question no 2 :
Explain in your own words the difference between decentralization and centralization system Or Compare both in own words.
Question no 3 :
Write five Advantages and five Disadvantages of decentralized and centralized system.
Question no 4 :
Which one is better for Business/trading and why? (write in own words)
Question no 5 :
How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.
Important All Homework posts should be posted in the community Steemit Crypto Academy .
Your Homework should be at least 300 words.
PLAGIARISM Will not be Accepted, make sure your content in the post is not copied and pasted from other sources.
Submit Homework Season 2 -Week 1 Post between 13th April 2021 To 18th April 2021.
It is necessary to complete all given questions in the week 1 course to gain the full marks.
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