Questions like blockchain can be centralized often arise, thereby creating confusion. People frequently fail to understand the concept of centralization and decentralization. However, before we know about the idea and its benefits, we need to understand the concept of blockchain thoroughly. Go through the article to learn more about the technology to improve your business.
What is Blockchain?
Blockchain is a sort of database that keeps data on a computer system in an electronic format. The data and information are structured in a table format, making it easier to search and filter specific details in no time.
A blockchain is a shared, unchangeable ledger that is used to monitor assets and record transactions in a corporate network. Moreover, an asset can be tangible or intangible. Hence, anything of value can be tracked and traced with the help of a blockchain network.
This technology helps to receive accurate information instantly, which aids businesses to run faster. Because it delivers instantaneous, shareable, and totally transparent information, blockchain is regarded as the greatest method for providing information. This information and data are stored on an immutable ledger that permissioned network members can only access. It helps to track orders, payments, accounts, production, etc.
Centralization of Blockchain
Centralization mainly revolves around us; for example, the social media platforms that we use are centralized like Facebook, YouTube, etc. Here, the central authority controls the data and functions. Therefore, when we use platforms like Facebook, it has complete control over the different aspects of their features. Moreover, it also has the ability to decide who can or cannot join the platform.
A centralized system requires third-party intermediaries for verifying the data and information. It means if you send a message to your friend using the Facebook platform, the data being sent will be first verified and then transferred by the platform. A centralized service stores the information with your consent.
Advantages of Centralization
There are numerous advantages of centralization. A few of which are as follows:
1. Command chain
In a centralized concept, the command chain is clearly defined. Any organization, upon using centralization, will know the chain of command. It means that the employees are aware of their job role and the concerned person they need to report. They also know the person under their control and are responsible for their subordinates’ actions as well. Moreover, it also means that delegation is accessible in the chain. When a network uses centralization, one central node or a collection of nodes are responsible for transactional verification.
2. Reduced Costs
One of the most significant advantages of centralization is its cost. Any centralized network requires limited support and cost. The costs associated with it do not cross budgets unless necessary to expand the network as the centralized organizations are pre-planned.
3. Quick Decision Implementation
Centralization organizations or networks enable quick decision implementation. They require less communication among the different authorization levels as the centralized networks have fewer nodes or people.