about blockchain and centralized vs decentralized

TWR Internet Solutions Ltd
A free video tutorial from TWR Internet Solutions Ltd
Providing high quality, affordable material
4.3 instructor rating • 5 courses • 59,794 students

Learn more from the full course

Learn Cryptocurrency Investment From Scratch

An impartial view into how to invest in Cryptocurrency and how you can avoid common scams and pitfalls

03:26:34 of on-demand video • Updated March 2018

  • Students will be able to go forward and invest safely without falling into the common pitfalls associated with cryptocurrency investment
English [Auto] We've made a two part three way we look at the application of cryptocurrency currencies if you've made it this far give yourself a pat on the back. You're learning so so much. It's just fantastic. Here we're going to cover what is the block chain and talk about centralized versus de-centralized. We're going to talk a bit about hard folks and the big problem with bitcoin. We're also going to talk about the big problem with them how to spot search trends. How much longevity is there in crypto. Let's look at the big picture of who is winning. And then I want to take you through pump and dumps and the danger there finally ending on platforms versus particles versus deps Let's not delay. We have a lot to cover. It's all great stuff. Let's get into it. So how does the block chain work now come up with a very very very simple diagram. And I really do recommend that you watch as many videos on YouTube as possible about how the block chain works and what it is. But I really want to just simplify the concept for you so that you can understand it in its simplicity and then build and stack your knowledge on top of that. So how does the block chain work. Now I want you to picture that blocks two three four five six and seven do not exist. There is only this block one and block one is where the first trons action takes place. That goes back to the first transaction. For example that took place with bitcoin. Then when they gets to block to block one's transaction is also included in the block two's transaction. So then when you move the transaction from block to block three you have the transaction for Block 1 and block to in Block 3 as well. Now this is not exactly how Bitcoin works but the concept overall and the principle overall is the same. The transactions for all the blocks before the block that got created today exist in todays block. Therefore if you were to try and commit some kind of corruption or change to the block chain you would have to not only change today's block but you would have to change every single block before it the more blocks that exist again similar to Metcalf's law in a way the more that exists the more valuable and trustworthy that block chain becomes so long Gerrity and track record is really important in cryptocurrency. So where we look at centralized versus de-centralized I found some really interesting graphics on crypto and compare. So I really want to use them as a great example for the benefits and disadvantages between centralized and de-centralized. So let's look at the benefits for say a centralized exchange. Now I'm going to use an exchange as an example but this could be any middleman that becomes de-centralized. So first of all the user controls the funds in a de-centralized setup where if it was centralized the exchange or the middleman would control the funds it's anonymous or it can be totally anonymous. And there is no ability to hack. And there is no server downtime because everything is recorded through the block chain. Let's look at some of the disadvantages of that. Number one de-centralized isn't very easy to use what's put a lot of people off of cryptocurrency is frankly it's hard for you everyday average person who might not be that techie to understand hence why this course exists as well. My training and background is that of a financial controller. I did not have a very techie background the only reason I could understand a lot of this is because I have done programming in my career that is not to say that people should be put off by cryptocurrency just because its complex. You just need to understand the pros and cons so in terms of decentralized it is not easy to use the features right now are kind of basic although I would challenge that because the more advanced cryptocurrency becomes the more programmers that are building DAPs on top of the theory etc.. The more features that are starting to appear just look at steam for example that we were talking about earlier. Now theres also a low liquidity theres not much money in the market right now and this is talking from an exchange point of view. So centralized you know theres a lot of liquidity there the brokers etc. are bringing in liquidity et cetera et cetera. I actually see that as an advantage because anyone who is getting interested in crypto right now this is the time to be in because its low liquidity and high volatility. And this is where money can be made big money. So risk to reward as soon as money comes into the system the percentage gains are huge and thats why you want to pay attention to the chart on the market that we were looking at. In previous sessions and when the prices are low and you can get in cheap when new money comes in the percentage gains are huge. A lot of the reason for that is because of low liquidity. So if you buy in with limit orders at great prices you're going to do really well. So essentially what we're saying the difference is between centralised and de-centralized is just that this lecture of trust known as the block chain is essentially the business. It is the Facebook it could be any one of these things depending on how it's being coded and structured. And it's shared across lots of nodes and computers around the world. It's not dependent on one company to stay ethical and provide financials and audit's etc.. None of that is even needed. There's no overhead cost there. This is why when we were looking at payback versus Pay-Pal earlier paper it can get away with charging very very little in fees. So I think de-centralized is a hugely important concept. And the longer that program is work in the scripts space the more they're going to perfect a decentralized system and the more effective it's going to become. In my opinion this is the future. This is how the Internet.