Crypto Academy Week 14 - Homework Post for [@levycore]

Excellent class, the teacher @levycore answers many of the doubts I have had and immerses me a little more in this great world in which I learn more every day, I am very grateful for your wonderful class and here I leave my homework.

_{Image taken from pixabay.com}

1. What is the fundamental difference between Cryptocurrency and the conventional financial system?

The fundamental difference between cryptocurrencies and the conventional finance system is decentralization. As the teacher explains in his class, over time we have seen how finances have gone from being through physical currencies to being digitized, but they still continued to be centralized.

A decentralized system is one that does not depend on a central node, that is, it is not governed by a single authority or by guidelines established by a single person, organization, company, etc. The decentralized system is one formed by a great variety of nodes, where all perform functions with the same importance, in case any of the nodes is damaged, collapses or fails, the system does not fall, simply the rest of the nodes follow running successfully and when the failed node can be restored it will be able to resume its activities without any problem.

So, even though the majority of transactions are digital, we continued to depend on a bank or the government in general, but with the creation of cryptocurrencies this stopped being the case, since, with the use of crypto assets for our transactions, we did not We require no intermediary, that is, the participation of the sender and receiver is only necessary for the exchange to be carried out successfully. In addition, there are no restrictions whatsoever, when carrying out a transaction it is carried out with all the freedom. However, centralized finance systems are still used normally, at least in my country, there are many people who are unaware of the advantages of crypto assets or simply do not believe in the advances of technology and prefer to continue using the means that known and trustworthy, since it is what they have considered accomplished throughout their lives. But the use of cryptocurrencies is more and more frequent in youth and in those who want to know new things and study to stay updated.

I would also like to talk about another difference and that is the security provided by the centralized crypto assets, since each of the transactions carried out are encrypted, that is, they are registered in the block chain, which makes this system more secure, in addition Another advantage and difference of these systems is the availability offered 24 hours a day, 7 days a week, regardless of whether it is a holiday or not, something that banks or centralized systems cannot offer.

2. Why is a decentralized system needed?

First of all, I would like to mention that decentralization is the fragmentation of a thing, then in a company this implies the fragmentation of power and responsibilities. Decentralized systems from my point of view are becoming necessary due to the amount of benefits they bring. This type of system encourages the participation of all the members of the businesses, companies, etc., since, by dividing the loads, all the employees have the same protagonism and in this way, the decisions and the power of the company are not in the hands of one person or a small group of people, on the contrary, everyone has the same commitments, in addition to this, senior staff can dedicate themselves to more specific things while motivating mid-range staff to contribute, help and excel in important subjects. It is even a faster way to make decisions, since they do not depend only on the upper part that is busy and streamlines the rest of activities.

Having this type of financial systems gives us the freedom to decide on our money, whether to sell it, whether to buy, whether to exchange it, since we do not depend on any public entity for it, nor on any third party, in addition, as the professor comments in his class, it facilitates us the possibility of carrying out international transactions, because, from any mobile device at any time we can acquire the currency we want and make the payment we want, in this sense, we do not need to go through any bank or the approval of any authority.

3. What affects the value of cryptocurrencies?

The value of cryptocurrencies is affected by different reasons, the main of which is the purchase and sale of it. By having a currency held in our purses while there are people wanting to buy it, that is, there is demand but nobody sells, this leads to an increase in the value of the currency, since, who owns it by observing the demand for this currency in the The market will put it at a higher price, in this way whoever really wants it will pay that price for the currency. The opposite occurs when all those who own the currency want to sell it and a smaller amount wants to buy it, those who sell it will put lower prices to get out of that currency and therefore, the value of the currency will begin to fall.

The price of crypto assets also increases or decreases according to relevant news and according to comments from influencers such as Elon Musk's tweet, which, a couple of weeks ago, announced that Tesla would not accept payments in bitcoins, which led to a huge crypto market crash.

_{Image taken frompixabay.com}

4. Why can't everyone be a miner?

First of all, to be a miner you need to make a large investment in equipment, previously you could even mine with graphics cards for video games but currently, there are specific equipment to carry out this work, therefore, a large sum of money is needed to enter in this world. Also, to mine you cannot do it with a single machine, since one of the countries with a large pool of miners is China and they have giant mining farms and basically you have to compete with them.

Another important issue is the large energy expenditure involved in working with cryptoactive mining, which could be an impediment for some. Similarly, there is legality, since in some countries these currencies are not legal, therefore, they could not become miners while they remain in that location.

5. Why can cryptocurrency transactions be called more transparent?

Primarily, this is due to the blockchain (chain of blocks), each transaction carried out with cryptocurrencies is stored in different nodes that make up a network, that is, it is stored in different computers, so that, if someone decides to alter this information in any of the nodes, the rest will find out. Also, as the blockchain is an open source technology, we can see the entire transaction whenever we want.

6. Explain how the development of cryptocurrency in your country?

Despite the fact that Venezuelans currently make up a considerable population in the world of cryptocurrencies, our beginnings were not easy, since, at first, I suppose that due to the ignorance of many, even due to the ignorance of ourselves about cryptocurrencies, The authorities of my country did not like this issue very much. Due to the economic situation that has trampled on Venezuelans a few years ago, we have found ourselves in the need to seek solutions by other means, for no one is a secret the large number of Venezuelans who have migrated and in the same way it happened with cryptocurrencies We saw them as a good project, we saw the future and we adopted it as an alternative to our economic situation, this very situation made us embrace bitcoins and cryptocurrencies from the beginning. But, just at that peak these systems were found illegal in my country, so much so, that the equipment of many people who were dedicated to mining was confiscated, since, due to the high consumption of light and the energy problems that Venezuela was going through in at the time, mining was considered a crime.

Some time later, the government saw the great advantages of crypto assets and proposed the creation of a Venezuelan token called: Petro. Later exchanges were created that could make changes to this currency and it began to be used for many administrative procedures in Venezuela, even it is still like that, to carry out some procedures they require payment in petro.

Currently crypto assets in general are legal in Venezuela, many are accepted in shops and as I said before, for many administrative procedures the Petro cryptocurrency is used.

CONCLUSION

Cryptocurrencies are a new topic for many people, but that, and the integration of decentralized systems mean great advances and benefits for the population that uses them. The security and freedom that these provide increase their popularity, since we all want to be financially free and feel safe when it comes to acting. Despite being a new topic, many of us address this magnificent information that nurtures and educates us to take firm steps in this crypto world.