Most crypto exchanges offer web based or mobile app based

custodial wallets. These wallets also come with password reset and

recovery features, similar to what we have in most websites.

1.5.4 Decentralization

Before learning about Blockchain, it’s absolutely important to

understand the difference between a centralized vs. the other types

of ecosystems. Figure 1.3 demonstrates the differences in their

architectures, as shown as follows:

Figure 1.3: Centralized vs. Decentralized vs. Distributed servers

Let’s explore each of them in detail.

1.5.4.1 Centralized System

A centralized system is managed by a centralized server that

handles all the external requests on its own. Centralized ecosystems

are relatively simpler to architect and control. However, the

disadvantages are the possibility of a single point of failure, mass

hacking, massive load, and monopoly resulting in a higher fees for

the transaction.

1.5.4.2 Distributed System

A distributed system refers to the location, i.e. the different

components of the ecosystem such as data bases, servers etc., are

located at different locations, possibly with their backups, so that if

one goes down, the other one can take over. The advantages are

high scalability, low latency, and fault tolerance. The distributed