Today i am doing my homework task of cryptoAcademy and I am doing my homework task for Professor @yousafharoonkhan. I hope to learn more from you professor.
Question no 1 :
Write the definition of Decentralization and Centralization in your own words. Explain these two systems in your own words.
Centralization as its name indicates that a system which is centralized or which has a control system and all the activities are controlled by a main center and the authority of everything is with the center and that is why it is called centralization or centralized system. All the powers in a centralized system are with one person or the head of the system.
Decentralization means the opposite of centralization I mean to say that in this system all the powers and authority is not with only one person and all the employes and the head work together and everyone has same authority in it and no one is under any other control and all the users are same and no one leads the system by its own and everyone has the same authority. All the people in this decentralized system have freedom of speech.
Question no 2 :
Explain in your own words the difference between decentralization and centralization system or Compare both in your own words.
|This system has one control center and all the activities of trading and marketing are controlled by a control center.||Well decentralization is opposite of centralization and in this all the users or members of a system have equal control on their activities such as trading.|
|Centralized has a high liquidity rate it means that you get your money cash easily.||Decentralization has a low liquidity rate and I think which might be difficult to accept.|
|Centralized systems are easy to use and that is why many people use it and because of its easy access it gets hacked most of the time and is not safe at all.||Decentralized system is very difficult to use and not everyone can access it easily and it runs on a blockchain so it is not that easy at all to get hacked.|
|Also centralization system all the data of the system can easily be hacke and changed by the person who have to the data main server and can change it any time they want.||But this is not the case in decentralized system because the data is kept in different servers where no one can access and it is near to impossible to change the data in different thousands of servers which no one can easily find.|
|Centralized systems goes down easily when there is a problem in one server whole platform goes down||But decentralized system never goes down and we have never heard that a decentralized blockchain is down it is only because it does not depend upon a single server and it is connected with different thousands servers.|
|Centralized system needs identification and without identification you are considered nothing in centralized system without identification.||Decentralization system needs no verification and anyone can use it and you can work on it being Anonymous .|
Question no 3 :
Advantages of Centralized system
Advantage of centralized systems are that they can be reachable and its liquidity rate is high.
All the users work together in a centralized system.
No digital transfer of funds occurs thus the rate of frauds decreases.
The center of the system is authorized and that is why less experienced people can not harm the system.
There is a check and balance system in the centralized system and all the users are under control so they can not do any wrong thing being under control.
Disadvantages of Centralized system
Centralized systems are always less in keeping strong security and get hacked easily.
Not all the people in the system has freedom of speech and to express their views about the new ideas
If the center person takes a wrong decision no one lower class person can guide it because they can not question the center.
Advantages of decentralized system
All the users are equally authorized and anyone can do whatever they want without being controlled by a center.
In this system people from different parts of the world having different experiences come together and work together to make the best decision for the system.
Ideas of all the newcomers and old one are appreciated and are considered valuable and gives chance to all the new users.
All the data in a decentralized system is stored in different types of servers which is impossible to hack also once the data is made it can not be changed by anyone in this blockchain.
Disadvantages of decentralized system
The big disadvantage or if I say the bad thing in decentralization is the high volatility rate and the fluctuations in the prices of the decentralized system sometimes leads to big losses.
Which one is better for Business/trading and why? (write in own words)
Well for me decentralized system is more good for business becuase all the authority is in your own hands and you can work on it according to your own ideas and decisions which i think a plus point in trading on decentralized system. If I got a change of trading on one of the systems I will prefer decentralized becuase of the proof of work systems and you can lead your business on top without asking anyone for permissions and for their approval nad also you can start your work with a small investments and centralized system will want a huge amount of investments which I think difficult for all the people because we can start a trading on decentralized sytstem with a small amount of money.
How do you know if a blockchain is decentralized or not? You can describe any method, but in your own words.
You can check weather the system is centralized or decentralized with the help of etherscan.
Just easily search for the Etherscan on google and check the website of Etherscan.
On the top website of the etherscan you will see a search bar where there are various options for you if you want to know about any system you can just simply search for it by its smart contracts or by its tokens or adress. And it will give you all the information about thet system.
Well to make sure that if a system is centralized or decentralized we will have to look for its all the information like its white papers and it contracts and through the research than we can check that if the system is centralized or decentralized.
Thats all about my todays homework for Professor @yosafharoonkhan.
THANKS FOR READING