I would like to appreciate the steemit team who start season 2 for learning system, in fact it is the best way to enhance knowledge about cryptocurrency world.
I congratulate the new appointed professor @yousafharoonkhan [Pakistan] who has delivered his lecture in very simple and easy words that everyone can understand easily.
All five questions given by the professor are here discussed step by step.
There are three main primary Network architectures, centralized, distributed and decentralized. In Blockchain technologies decentralized network is often used. Decentralized is sliding scale so it is being used in all aspects of blockchain networks.
What is Decentralized system?
A decentralized system is always an interconnected information system where a single party/individual is the only authority. In the world of computing and information technology decentralized system is commonly found in the form of network computers.
For Instance, internet is a decentralized system but it has become centralized by the time.
With the advent of blockchain technology decentralization network has become popular and got more attention in the world of cryptocurrency. Cryptography and Markov chain properties are forced to provide consensus about the financial transactions that occur in this system. In this way verifiable distributed ledger of transactions remove the need for centralized authority.
In short, decentralization always refers to transfer of control and decision making from a centralized entity (organization or individual) to distributed Network.
Advantages of Decentralization:
Decentralized improves efficiency to provide services as it increases the self confidence of clients and make them enthusiasts in their work.
In decentralized hacking is 0% therefore funds are safe and secure.
This system has light burden on high management so it is popular among people.
The user is the center point in the decentralized blockchain and all the data is stored in it so no one can edit it and in this way everything is safe in all respect.
Decentralized blockchain provides good cooperation as it increases better participation in Governance.
Disadvantages of Decentralization:
Transactions fee of this system is high.
It takes more time to transferring funds from one account to an other.
In decentralized cryptocurrency price is fluctuated and not stable even transactions.
What is Centralization?
In centralization, all activities and decisions are controlled by a single authority or an organization. Every individual is attached to one place or head office where they receive orders and decisions.
Centralize means to bring center. In other words, to consolidate centralize all the data in one file. It can be understand by this, to concentrate this centralized system connects to the central point where a group or a party is present that is empowered in decisions making and control all entities of a program or a project.
We can say that centralized system works against decentralized system as these both are opposite to each other.
In image view, we can see that all the network activities are connected to the main server and then other computers receive data from this server. So this is the best example of blockchain network.
The following image explains the centralized system that's branches are connected to one station and it has spread itself around.
Advantages of centralization:
Since centralized system is controlled by one authority, there is an easy way to complaint against any problem.
All decisions are quickly implemented as high commanding orders.
Everyone has to report his performance to the authority and the authority observe every action and function for betterment.
In centralization network, funds are not transferred to the wrong people.
This system is popular because an authority is responsible for every bit of action.
Disadvantages of centralization:
This system is authorised to one party so lower level users are not allowed to participate in decisions making and there creates frustration.
The security system of centralized system is weak and hackers very often hack the users accounts and withdrew their funds.
Editing option of users data is available in this system and that is not a good thing for users as well as authority.
Sometimes authority prefer to some users to the others so this is not fair.
Comparison of centralized and decentralized systems.
When ee read both the systems, we come to know that centralized system is used mostly in exchanges and users have to get verified for business in centralized exchanges whereas there is no need of verification of any user in decentralized blockchain.
Users control their funds in decentralization system but on the other hand, there is not any control over the funds in centralized system only the authority has control over every thing.
Decentralized system is reliable as every user from anywhere can be connected to this because it is not run by a single party or an authority as compare to centralized system.
Decentralized system can not be shut down the network even the present of computers as it is run by the users but centralized system can be shut down the network at any time and users can do nothing.
Centralized system is easy to run whereas decentralized system is not as like that.
Decentralized system is never hacked by the hackers but centralized system has been hacked many time in many countries in the world.
Liquidity in decentralized system is low but scaleability is high and in centralized system liquidity is high but scaleablity is low.
Which system is better for business:
After understanding decentralized system and centralized system, it is easy to make decision that which network is the best for business. But before starting our business we should see the naturae of business for example, long term, short term and where is necessary to take decision for business in cryptocurrency in right time.
We should also keep this thing in mind about centralized system that is controlled by a authority before investment for business purposes.
In short, I think we should be careful in investment for business in both the system but decentralized system is better than centralized system.
How can we check a network blockchain either centralized or decentralized:
First we go to google and write eherscan.io as you can see it in following screenshot.
Then we see the following display and in searching bar, we paste a copy address of our required token, taken from coinmarketcap, to see either its blockchain is centralized or decentralized.
When we paste the address it looks like this as we can see in the screenshot.
In the last we click on contract to the result as shown in the following screenshot.
Now it is clear to me that Fantom is a decentralized blochchain as I have not found any of these words
function destruct only administration, self destruct
after clicking on contract.