Decentralization
Using my words to define decentralization I would say it's a system where every individual plays a role in the governance of such a system in essence everyone's opinion in such a system count and those decisions can be used to make special regulations in the system.
In general terms, a decentralized system is not solely controlled or regulated by a single body or authority. it allows flexibility of usage in which its interoperability allows another blockchain system to connect and run operations.
Centralization
While the decentralized system is interoperable in which different blockchain systems can operate directly from different blockchain systems the centralized system is run under the supervision of a central body in which an operator will need permission from a central body in other to connect with a centralized blockchain or financial system.
This means the centralized system is run by authorities who are making a special decisive decision in other to run its system.
Difference between the two systems
From my above description of both decentralized and centralized system, it can be seen both systems are different for a decentralized system every individual has the power to make decisions that will govern the platform while for centralized system authorities are in charge of making decisions that will help run and govern the system.
Also when considering security system in both systems decentralized system is considered to be more secure in terms of handling users fund decentralized system is more hack free while the centralized system has been faced with several hacking issues where users fund have been withdrawn from hacking.
Users information on the decentralized system are safe as their detail cannot be edited by any third party while on centralized system users information can be disclosed which can lead to account hack.
Advantages of decentralization
Security; the decentralized system provides users with maximum security whereby users' funds can be are controlled using the custodial system.
Usability; the decentralized system provides an advanced protocol for usability where a wide range of users can connect to the system unlimitedly.
Interoperability/flexibility; with a decentralized system other blockchain platforms can connect with other decentralized blockchains.
Decision Making; no direct governance in a decentralized system as users' opinion and decisions can be taken.
Disadvantages of a decentralized system
In a decentralized exchange platform, it's difficult to get support which means resolving complaints from customers takes a longer time.
None custodian privacy use; since all information is at users' risk any lost account will be difficult to recover.
Anonymity; transactions on the decentralized blockchain can be difficult to track which are used for promoting illegal transactions among users.
Advantages of centralized system
Quick support; customers tend to get their problems resolved faster in a centralized system.
Organized decision making; fast decision making can be reached on a centralized system. as decisions can be made from a single body or few groups.
Transactions tracking to avoid illegal fund transfers can be managed in a centralized system.
Customers can easily recover lost accounts on a centralized system.
Disadvantages of a centralized system.
Leaking user's info; in a centralized system, customers can easily lose their details to phishing or hack.
Autonomous decision-making; those in a high position will be able to make decisions in a centralized system.
Regulation; the centralized system can be easily regulated by different bodies.
Which one is better for Business/trading
Although the decentralized system has an advantage which is users' privacy use case when it comes to managing funds I will go with the decentralized system.
What I love about a centralized system is users get support from customers supports services that are not always found in a decentralized system.
When it comes to choosing which system is preferably for trading I will go with the centralized system as I've used the system for several years without any difficulties.
Although I use both systems integrating the two systems is more secure it depends on which you think is more preferable.
Conclusion
Both centralized and decentralized system has limitation so they depend on users choice of use.
Posted originally by me here