Bitcoin Forum

We know the advantages of decentralized however what are the disadvantages of the Decentralized system that we should take note of while using this technology?

Probably the parting of people with different opinions into multiple factions. If certain people disagree with how bitcoin is moving forward due to different opinions on how things should work, they split off and fork bitcoin. A perfect example of this would be the big blockers, whereas they forked off and created Bitcoin Cash(BCH). As bitcoin moves forward, there's definitely going to be more of this. With a decentralized system, there's no centralized authority to make the decisions hence the splits in the community. I think this is both an advantage and a disadvantage.

do not have a lot of services such as businesses with a centralized system, and also services that are under a centralized company standard, because the cost of enjoying decentralized services is very cheap
maybe I will choose decentralized services if the features and services have been improved

this is a great explanation for this, you are definitely right. I wonder how many more coins we will have, its an indefinite amount i assume.

it is true that it is super easy to create a new coin but not every creation is a good one. coming up with an innovation and also implementing it in the best way possible is the key to have more than one actual coin, otherwise copycoins such as BCH,... are worthless shitcoins that shouldn't even be counted towards total number of "coins" we have.

Decentralization makes decision making more complex, because you have to get a majority of people to support a change, before it can be implemented. We saw this happening with all the previous forks and all the drama that went with that.

In a centralized network with a single authority, the decision for changes can be done much quicker, because the centralized authority is calling all the shots and they force changes onto whomever is using the network. This is why people are moving away from centralized solutions, because these centralized authorities are corruptible. <most of them are>  ::)

another "disadvantage" which may not be a disadvantage forever is the fact that there are no laws about such systems so prosecuting criminal activities is harder. for example if you attack a website (like DDoSing a website) that would be an actual illegal act and you may face prison time. but if you attack a decentralized network like bitcoin's (which had lots of attacks in the past in different forms such as spam attack, DDoS attacks, FUD attacks,...) there is not YET any laws that can prevent these crimes.

for example if JP Morgan CEO went on TV and said Microsoft is a fraudulent company then Microsoft would sue their ass and most probably receive a couple of million dollars from them because of this attack compensating for the damages they caused to their brand and company. but when they did that to bitcoin there was nobody to sue them and they got away with it...

The notion that chaos creates order is not always necessarily true, as seen in some recent forks which are shaded by some sort of politics, ending up in a massive shit-show that the community never asked for. At first, decentralization sprouts genuine and cool ideas, but the moment crypto rakes in a lot of money in the hands of the holders, it is then tainted with greed and politics with only profit in mind without even thinking of the community that might get affected.

I'm believe in anarchy in some way but not to the extent that chaos only breeds chaos.

For me decentralized systems are more expensive to implement and more energy-consuming.
Those are the major disadvantages.I don't think that forks/splits are a disadvantage.The people,that have different views about how the desentralized system should evolve and improve just have the freedom to leave.This is not a flaw.

In economic terms, the disadvantage of a decentralized system is the increased transaction costs. See: https://en.wikipedia.org/wiki/Theory_of_the_firm and https://en.wikipedia.org/wiki/Ronald_Coase

A lack or regulation is good for some, but for business investors they need a legal framework in order to trade. Decentralisation also makes it hard to get help if there is no one controlling it

it is worth mentioning that any system in this world will have both advantages and disadvantages at the same time. you will never find anything that is only positive and has no negative side.
when it comes to bitcoin and its decentralization, the advantages are dominant over disadvantages which is why it is a big deal.

Decentralized System's biggest Disadvantage is to allow some illegal transactions to continue in the dark corner, because Decentralized System excludes regulation, and we all know that anything that is out of regulation will be used by the bad guys.

People already mentioned decision-making, lawsuits and transaction fees as the main disadvantages. I agree with the first two, but I am not sure about the third one, because transaction fees for high sums are definitely cheaper than with any fiat if you use bitcoin. Transaction speed - now, that's kind of a disadvantage, but of blockchain, rather than any decentralized system (DAG is a good counterexample. In theory, at least). However, if we compare the speed with swift transfers, then blockchain is faster. What I think is a disadvantage is lack of responsibility. If people lose their money due to some bugs in the technology, nobody is really responsible for refunds. And I don't think this kind of problem can be solved, but I guess it's something we can live with.

disadvantages:
1. people:
when people think a network is decentralised, they get stuck in the mindset that even if centralisation happens and the rest of the network is just distributed. they still think its 'decentralised'. which then makes it harder to actually redecentralise the network because the central power will just force the decentralists off the network, using the distributed sheep that dont realise they are following centralisation.
(distributed and decentralised are two different things)

2. organisation:
when a centralised group forms or a attack occurs.. trying to convince distributed people which is the right or wrong path, action to follow is not straight forward. a well paid development group with $100m to throw around and code things that bypass individual voting/revokes individual decentralised 'vote' power. leaving the network as 'distributed' not decentralised.

3. excuses:
anyone coding new rules can use the 'decentralised' argument as an excuse to ignore communities needs and say even when there is a consensus of the community, that the developers dont need to follow the consensus because of whatever excuse they can find that consensus is wrong and they are right. thus bypassing consensus to get what the developers want as new rules rather than the communities compromises and commitments to get to a fair majority consensus, by which time the community are just left as distributed compatibility non voters or thrown off the network when people oppose centralist decisions.

basically if decentralisation gets diluted too much it then becomes easy to over power the 'individual' to then centralise the network

^
is like saying: "it seems high fee's are ok because the rich dont mind them"

that there is the mindset of excusing the issue because it favours the rich of developed countries.
think about the 5 billion people NOT in the rich/developed countries

then you might understand.
though i personally am a white brit. i can see the impact fe's have on multiple countries because i actually went and visited countries. when thinking of decentralisation its best to think about others. not just a typical rich wall street american

imagine a country where 25cents/pence was 5 hours labour for a dozen countries
saying 25cents is acceptable is ruling out the desires of a dozen countries
saying $1 is cheap is ruling out several dozen countries desires

if the rich want to pay more because its still cheaper than other methods. then they should pay more

EG bring back a fee priority mechanism
fee =
total sats=(bytes + (total input value/1000))*(144 - confirms of inputs)

this formula would make it so that
1. if someone was to spam the network everyblock(1confirm resend) they pay 143 times more than someone that only spends once a day.
2. those that send more, pay more.. they can all afford 0.1%
3. if someone had a bloated tx of 2.5kb vs someone with only 250bytes the bloater pays 10x more for the 10x space they consume

Currently, the main disadvantages of decentralized systems are low transaction throughput and poor scalability. These problems inhibit the development of decentralized systems.

that is not a problem of decentralisation. that is a problem of a centralised group deciding not to change the code that has put limits in to prevent scaling.

blockchains can scale if you alter the limits imposed

Everything in this world has their own advantage and disadvantages.
The bad side of this might be from the government and they have no control on it.
That is why until now BTC can't have the ETF it wants from many government.

The redundancy required to make Bitcoin decentralized also makes it quite inefficient when compared to centralized databases. Many distributed nodes need to propagate and store the same data. This entails large bandwidth and storage costs for each node, which wouldn't be necessary in a centralized system.

I think it's an advantage myself. Every time it happens and fails, and all of them will fail at least in the sense that they'll never usurp what they sprang from, it makes the original stronger and reminds people why consensus is the only thing worth bothering with. If you want to buck it, expect to get bucked yourself.

At the moment it is a major problem until the limit to the code is altered. But my fear is that, if it's altered and scalability sets in, what then happen to transaction charges, do you think it would increase or.decrease?

There many disadvantage of decentralized system but those the affect the crypto currency community are the people choosing side which literally lead to fork of coin, people abusing the decentralized technology by using to make illegal transaction and creating of fake ICOs which is currently happening through ETH smart contract but ETH are not to be blame though.

I agreed with what you said because the decentralized in nature of bitcoin was what causes the fork of bitcoin network which lead to the birth of BCH,BTG etc. However, I believe one of the disadvantage decentralized system of crypto currency is not been endorse/supported by the government and I also believe been decentralized of bitcoin was the reason why the government are the number enemy of bitcoin because they see it as a threat to their power.

allowing more transactions in. takes pressure off the mempool
also if a fee priority is put in place where by a user spending more often pays more. then spam decreases
meaning people dont just make transactions for the sake of it (mixers/tumblers/de-tainters) or who just run their coins through just for the sake of running coins through (spam up mempools)

so seeing a reduction in people spamming the network with bloated transactions, spending every 1confirm will become something rarely seen. allowing for others to transact easier and cheaper.

i think the disadvatage of bitcoin and cryptocurency with decetralized system, is its hard to makes legal in evey country because it dont have the central like the other bank and e currency system that we know right now

When you use centralized systems, you can look upon to that centralized entity in case you make mistake, example - bank frauds. In decentralized systems it's not possible, you are on mercy of receiver if you make mistake.

that's when there is no control so anyone can do anything here. decentralization can be a disadvantage if it is used for illegal
purposes, but I think centralization also has disadvantages, so there is nothing perfect here..

  In decentralization and centralization there are advantages and disadvantages there is a chance  to misuse the power  in centralization and in decentralized one the communication flow will be free and open, decision making will be slow in centralized and in decentralized one decision making will be faster; and the decision making will be only on the top management in centralized system and in decentralized means there is multiple persons to make decisions . The biggest draw backs in decentralized business is that if the person is not experienced or not trained then the business may be harmed In decentralized one there will be a chance for unhealthy competition and will be lack of co-operation .As a whole if we analysis about decentralization it will not be always a good strategy but the disadvantages of decentralization can be controlled by the degree of authority . Even though both centralized and decentralized have extremes that can be avoided and in Bitcoin transactions decentralization is a good strategy.

the fact that you just can't keep track of the scammers who stole your money. This is a huge disadvantage of this technology.

Decentralized systems with skillfully created architecture don’t work well with a small number of participants. If there are a large number of nodes and network participants, then the reliability of such systems only increases. Existing problems with Bitcoin are caused by its small distribution and the possibility of large players to carry out manipulations.

What ever has an advantage also have it disadvantage and blockchain and the decentralized system is not an exception to this fact, since decentralization make it impossible for any transactions carried put under it untraceable it then make it clear that any mistake done can never be undone in the decentralized network.

It always vase-vasa what every is good most have negative or bad part, decentralized world is always know to have the highest risk compare to centralized world were every thing is been done face to face. Because in decentralized world or network the transactions is mainly done using internet and block transaction is always know to be undo able which is the main disadvantage when mistake is done.

A lack of control can have a negative impact. Resolving the issue with transaction speeds could have been done by a governing body and prevented the debacle with with bitcoin cash

Chaos and anarchy are two issues that loom in a decentralized system. The proliferation of blockchain projects is an example of how chaotic such a system can be.

First of all, we know that the decentralization of cryptocurrency primarily means its high price volatility. This is both a virtue and a lack of cryptocurrency at the same time. The negative side of the high price volatility of decentralized cryptocurrencies is that it is very difficult to use as a means of payment, and therefore the government is not in a hurry to legalize it. Without legalization of cryptocurrency by the state, it cannot develop further normally.

I think that this is the absence of any regulatory body that could protect the interests of investors. Many people get into bad situations due to lack of knowledge or any other reasons. But I think it's a small disadvantage. And maybe it's even a advantage. After all, it teaches us to be responsible and that we were able to make decisions.

Volatility is main problem considering the facts about latest decentralized exchanges. Decentralized platforms let investors to take care of their own security without wasting time with rule of different regulators. Knowledge is the power in this industry and smart investors will survive no matter which direction markets choose.

Every thing must have weaknesses and strengths, so we cannot ensure that something is the best. The most important thing is how the government attitude towards cryptocurrencies, when the government provides support for cryptocurrencies, will make crypto development even better.

      The decentralized system is very suitable for the crypto market. This decentralized system can not control and influence a currency, and that's a big advantage. A decentralized system has few disadvantages, and these are small disadvantages. Decentralization makes many beginners quit the crypto market because they do not have a help guide, they do not know where to ask for information and give up. If the crypto market used a centralized system, it would have been dead for a long time.

this is just a natural phenomenon for decentralized system. This is not a disadvantage because it has proven already when bitcoin reached to its market price which is the 19K USD last 2017. THe only problem with the system was the anonymity feature where many are encourage to scam, hack and doing fraud from other users. THis is why more investors are discourage to invest because of the likes of this users in cryptocurrency.

Perhaps, decentralized disadvantages is I think since we know that anyone are welcome to be in this system. But the problem there are some people who are bad, where they can use this to their illegal transactions. Due to we knew that every time we used this system We are also pseudonymous or anonymous.

That's only true for the very first years of a project when it's still immature and not well-developed

I think Bitcoin is already past that. Obviously, you are going to tell me about Bitcoin Cash and a host of other Bitcoins. But if we cut the crap, people who created these shitcoins were looking for getting rich quick, not for making Bitcoin any better, whatever they may say to the contrary. With time, all such forks will be dying a quick and painful death, while people actually looking for innovation will be creating altcoins, not Bitcoin forks

The block size debate had been ongoing since 2015, if not earlier. Bitmain, Roger Ver and others had loudly supported previous efforts to increase the block size with a hard fork (XT, Classic, Unlimited) with no intention of a network split. So, it doesn't seem obvious that it was just to get rich quick. "Hard fork dividends" became a thing in late 2017 but before the Bitcoin Cash fork, nobody knew what was going to happen. An adversarial split (like ABC vs. SV) could have just as easily crashed prices and lost lots of money for the forkers.

If Bitmain really wanted to get rich quick by propping up an altcoin, they probably shouldn't have forked Bitcoin -- they gave Bitcoin holders millions of free coins to dump on the market. :D

They are amongst the largest holders, so there isn't much for them to lose there, especially with how every exchange was basically forced to ride the hype and list BCash as soon as possible. On the runup to the Coinbase listing the price shot up to over the $3000 level, and I'm certain that everyone within the big block camp has done everything to sell the crap out of it.

If you also add that BCash is another large SHA256 chain, they could finally have their older miners running in a profitable manner again instead of having it be worthless scrap metal.

Bitmain and Roger got a free ride to the moon, although Bitmain went too deep and shot itself in the foot unnecessarily.

I agree that the main disadvantages are the divergences of views and different vectors of the development of the decentralized system, taking into consideration a huge pressure from the opposite side. However, this is also a kind of advantage due to the ability to find the best way to promote blockchain technologies

But let's admit that the moment for the Bitcoin Cash fork was an extremely fortuitous one

And the folks you mentioned (Jihad, Ver, Craig) had likely made millions with this fork. The last split, though, looked more like a typical family quarrel which had nothing to do with either technical issues or profit considerations. Most likely, it was caused specifically by the lack of profits (quarreling over last crumbs of the pie) just like the Bitcoin Cash fork was caused by the anticipation of them. These dudes are in exclusively for money


It is the end result that counts, and in the end thousands of these people became bagholders. While Bitcoin may make new heights, in a year or in a decade, Bitcoin C(r)ash (whatever color) is likely to kick the bucket in the interim

Since there is no an authority and a regulator, taking and implementation of a decision is more difficult. But each stakeholder can defend his / her right more in decentarlized system.

The disadvantages of a decentralized system are that there is no responsibility for various negative actions. Since the cryptocurrency is not regulated by anything, it generates a great lawlessness. Also, there is nobody who could protect the interests of investors. But this is a controversial issue. Maybe it's not considered a big disadvantage for someone.

I think this is what stopping your money scammers will go completely unpunished. this is very bad

In comparison to the old ways of doing things it's considered decentralized, it can be seen as one step at a time for some people.

Another thing is that it is not really a bad thing because that makes mass adoption possible without risking the business processes of companies who decide to take the leap. Especially the biggest ones.

I think the disadvantages of decentralized system is the issue of control or regulation.
Lack of regulation in the Cryptocurrency space for example is the main reason why there are proliferation of ico projects.
Another disadvantage is the issue of security, as a breach in one system may likely affect other systems .

Things can still be regulated but this is a new technology, thus the government is still in the process of finding a good system to regulate this system. Blockchain is a perfect technology for me as it provides real transparency, we do not need to rely on people that proclaim they are trust worthy but in reality we never know if they are. System can never be cheater, it has no emotion unlike humans that are very close to temptation.

Here are the disadvantages which are based on my studying of cryptosystems:

• High hardware requirements

         It seems, the world is moving towards cloud-based systems. For example, let's take a look at what Apple is currently selling: MacMini and Macbook Pro are still have the base configuration with only 128 gb SSD, iMacs are still being offered with hard drives (pretty ancient technology at this point). For basic usage that's okay. But if you need to be involved in crypto, you should have a much more capable machine.
        Even if you don't intend to mine coins, just to be able to make transactions you are supposed to run a full node. Yeah, there are some workarounds, such as using third-party master nodes or whatever they call them, however, almost all of the available approches are not recommended by security experts. When you don't have your own full node you are relying on someone else's fairness. And, as you may know, humans are not the creatures we can blindly trust.

• Low protection against criminals

        In a fully centralised system we know who is responsible for all the good and evil things. If somethings goes wrong (e.g., your money was stolen), you will still have a chance to resolve the issue successfully, because you are protected by the law, and you know the entity you should press charges against.
        In a decentralised system you are on your own. If somethings goes wrong and your money's gone, nobody will help you. It's sad, but (at least in current implementations) the only thing you can do in this case is...to move on.

• High complexity

        In a centralised system the most important security decisions (e.g., 2FA, MFA, Oauth etc.) were already made for you. In a decentralised world you should invest the time to ensure that your savings are protected taking into account all recent advancement in cryptocurrency infrastructure.

• Possibility of 51% attack

        Basically, there is no way to prevent someone from controlling more than 50% of the network's mining hashrate, or computing power. And if this happens, all your coins value will be dropped down to zero because you are no longer protected by the blockchain.

• Hard to implement refund policies

        It's hard to image a shop that successfully operates without providing clear refund policies. If you are not 100% satisfied with your purchase, you should have a right to return the product and get a full refund. With constantly increasing complexity of cryptocurrency systems it's getting more and more difficult to incorporate refund features into the shopping flow.

That's what I can tell you regarding disadvantages right off the bat. Personally, I believe that all or almost all of the aforementioned points will be resolved in the future by some talented people who always come up with unpredictable and bright ideas.

Idex,Etherdelta,Forkdelta is most favorite Decentralized exchange. But now many peoples don't believe those exchange for fraudulent activities.
There are no regulation in DEX exchange i think it's big problem like Suspicious transaction.

in my opinion the most difficult thing in this decentralized system is that it is difficult to implement in the real world, the reality is that there are still many things that are not suitable to be implemented but are forced and in the result, it only gives unimportant features and does not even have an impact on the decentralized ecosystem

It is really a hard thing to achieve cent percent decentralization on everything. When it comes to decentralized exchange, it is a must requirement for the growing decentralized cryptocurrency network. Unfortunately quite often some sort of hacks make the users fear much about holding the assets even on the decentralized platforms. The security risk keeps growing as hackers are more intense towards cryptocurrency looking its growth happening with time.

There are disadvantages too and it is common for any new technology and for decentralized blockchain technology what I see as disadvantages are,

1. Lack of authority to control price fluctuations - Unlike central banks for major fiat currencies to control fluctuation levels bitcoin and majority of crypto has no party to step in and balance the situation
2. Lack of acceptance from governments and other centralized organizations because many afraid to trust a system that has no leadership so even decentralized digital currencies are potential majority of governments refuse to accept them

Above are not problems for us or that we cannot eliminate with time but are major facts why a certain percentage of the world haven't still accept our community

Bitcoin have advantages on decentralized system because government regulation can not touch bitcoin and government can not control the transaction data. But the disadvantages this decentralized system is government can not issue regulation on bitcoin if used as currency.

Decentralized mean there is no authority to guide or control the system under any circumstances which can give benefits to its users such as low transaction fee, efficiency but also gives disadvantages like non reliability, lack of support services and other which are provided by administrators in any digital system but that kind of service comes with a prices so there are both good and bad for users when using a  decentralized system

I heard that some countries are now regulating bitcoin but how did that happen ? Because im thinking the same way as you   ,  i thought decentralized means its immune to regulation ?

Anyway , when it comes to disadvantage of decentralized system i think that is the unstableness which causes the price to fluctuate too much and the anonimity which can cause for more fruads and other illegal doings  but i love it better because government arent in control which means its safe from severe manipulation and corruption  .

You said it right mate,the dark side of the centralized crypto community is one big factor why the disadvantage occurs without regulation this can be use in many bad aspect such as fundings the terrorist or used as payments for illeg Transactions like gun running or drug trades

The above option was indeed some attribute which was the disadvantages of decentralized system of crypto currencies but if you look at the bright side of it, the government hate decentralize of crypto because it the total liberation from the government and the banking sectors failure. Concern the lack of authority, the crypto community are the authority which crypto currencies have but it unfortunately that people sides.

To my mind, one of the disadvantages is that decentralized exchanges, if we take exchanges as an example, have lesser pool in comparison with centralized platforms. Furthermore, for a cryptocurrency to be presented at the exchange, it is necessary to employ a smart contract, and not all of them use it.

There is no one can trace every transaction in decentralized system on which can be possibly used in illegal activities that is breaking the law of the government and can cause us a risk. Also, there is no specific people that we can contact if something bad for our transaction has been happen on which only the system work on it and we didn't know how long before it become working properly again.

There are many advantages to consider than disadvantages and that is the main reason why blockchain technology and decentralized currency systems were introduce in the first place but with decentreliazation many systems doesn't have authorities to manage them in order to make sure they accomplish there vision and mission which was build in the first place and that is the main problem why some decentralized inventions tends to faile without achieving there targets

I'm sorry but your are out of topic, we are not talking about exchange, we are talking about the decentralize system as a whole, like the blockchain.

So you are saying that fiat is not use for funding terrorists and illegal transactions, regulation does not solve it but will minimize this kind of activity from happening. I will still vote for the blockchain to remain and be successful, give that task to the government if they want to regulate, as long as it will not change the technology which is decentralize.

The way I see it, they tried to corner the market much like the Hunt Brothers did with the silver market (https://en.wikipedia.org/wiki/Silver_Thursday). It sounds great on paper: Use obsolete hardware to mine Bitcoin Cash, withhold mined coins from the market and buy at spot to drive up the price.

I just think it would have worked out much better for Bitmain if there wasn't a gigantic supply of coins perpetually waiting to be dumped on them -- coins everyone got for free when the fork launched. :D

I don't think he is actually offtopic here

The sad truth is that centralized exchanges turn this whole decentralized system into a centralized system too. As you might know, most of cryptocurrency activity happens at exchanges whether you like it or not. So you can't just choose to ignore them even if you are talking about the decentralized system as a whole. It is a fact of life, a part of reality if you please, which you simply can't ignore. If you, nevertheless, do, then the conclusions you draw won't be relevant. They will be fallacious and incorrect

There are some disadvantages in a decentralized system such as lack of control over the system, non one to handle the network in critical situations and some miner issues but non centralized systems can eliminate far more critical problems which has in a centralized system but we should understand that no one can understand the true potential of decentralization because before bitcoin, Ethereum or any other non centralized currency decentralized payment systems didn't exist in the world and many kept there trust on controlled organizations such as banks. investing companies and other so when we say turning centralized system into decentralized system through blockchain technology can be beneficial so even there are some miner disadvantages in a decentralized system it is valuable when considering significant benefits  

There are so many disadvantages of decentralized but almost all of us believe that there is more in advantages like no government can manipulate the value of bitcoin, everyone can buy without authorization, anonymous profile. The only disadvantage of decentralized is that there is no law above it so you can blame anyone except yourself.

in my opinion the decentralized system  does not have business services with a centralized system, and also decentralized services are very cheap, in its use we must also be careful