Steemit Crypto Academy Season 2: Learn About Cryptocurrency
1. What is the fundamental difference between cryptocurrency and conventional financial systems?BTC developed by Satoshi Nakamoto in 2009, It may be one of the greatest inventions in human history and the identity of the person or persons who created the technology is still a mystery human most people. . It has great differences and advantages compared to to to the traditional financial system. To fully understand this, Decentralized system or cryptocurrency, Cryptocurrency can be transacted by any person and any day without any restriction of the third parties in transactions you can send cryptocurrency to a person living on the other side of the world Most people are not aware of BTC yet.
This is one of the biggest differences between cryptocurrencies and traditional finance transactions using cryptocurrency or Decentralized system is done independently with the miner running mining to transfer the cryptocurrency, trading without any involvement of the third parties system through decentralization or cryptocurrency,y the existing conventional financial systems the centralized runs central systems authority which comes with the involvement of third parties system like BANKS before a transaction can be completed. For example, we r can send cryptocurrency to another person without any intermediary or any involvement of the third parties system in the process of the transaction of the coin, but a conventional financial system involvement banks before making the successful transition sometimes results in delayed transactions fund.
One of the best features of cryptocurrencies is the transparency of the transition the blockchain technology transfers cryptocurrencies in open sources to everyone. all People and users can see all transactions made on the blockchain, but In the traditional financial system, only the person how to transfer the money can see it transitioned there no transparency in traditional finance.
The Transactions made by cryptocurrencies are faster than the traditional financial systems or banks. transactions in cryptocurrencies transactions we transfer any day anytime any week any month on holiday involved There are no such working hours in cryptocurrencies 24/7 working but as knowing the traditional finance use bank only works 6 days in the week and in a day 10:30 am to 5:30mp we can traditional every day and they have a holiday if use app to transfer the money there is server maintenance the time we cannot make transaction there are so many obstacles in traditional Finance.
Cryptocurrencies are more secure than financial systems because of their blockchain technology blockchain is like a fingerprint very had to hack. os hacking is very rare. Hacking and security problems are common in financial systems because they use a centralised server to run their banks if somebody hacks that one server all the funds are lost.
2. Why is a decentralized system needed?A decentralized system because of its Independence of Transaction in Decentralized system there is no involvement of third parties system in transactions and the user or person in the Decentralized system can make a transaction of choice like (Buy, Sell, Swap, Exchange) independently without the involvement of third parties system and without waiting for a central authority system or bank before performing a transaction of our choice, For an example, if we send 100 steem or SBD it takes only 3 to 5 seconds to transfer Steem or SBD to someone who is lives on the other side of the world on a Steem blockchain. just think of sending money to someone on the other side of the world with a bank account It takes an average of 2 days to 14 days is more this depends on the country and the method of sending money between two countries, and it is a news difference between cryptocurrency and conventional financial systems.
cryptocurrency is compatible with smart contracts which give automatic transactions to make the timeliness transaction in cryptocurrency and this A important feature that is not available in a centralized system, for example, there no rules are any central authority before action or process through smart contracts in the decentralized system this makes our transition timeliness transaction in cryptocurrency.
Transaction fees on cryptocurrency are very reasonable in decentralized systems and there on fine, any kind, unlike traditional financial system or centralised system, take fines if we need to transfer fund after their working times or to transfer amount that exceeds our account limit, cryptocurrency Transaction fees are paid to miners who verify our blocks in the blockchain. It is necessary for the system to run. In a centralised system, brokers and agents take part in it and they become to be richer.
We need a decentralized system or cryptocurrency for a more timely transactional, low-cost fee, more secure for our money transparency of the transition and for decentralized system based platform.
3. What affects the value of cryptocurrencies?One of the most important issues that increase the value of cryptocurrency is supply. For example, Bitcoin's total supply is decreasing by 50% Bitcoin uses a method called halving makes the profit miners 50% less, for example, clearing A 1 block a Miner gets 1 BTC in the next halving he will get 0.5 BTC note:-fist Halving on 28 November 2012 50 BTC reward per block 3rd Halving May 2020 6.25btc reward per block 4th Halving Expected 2024 3.125btc reward per block, this creates a shortage of cryptocurrencies in the market and causes the price of cryptocurrencies to increase very high due to the supply-demand in the market.
Overbought or Oversold:- Overbought that results in the increased value of the crypto asset, for example, the markets have heavy demand because of any other influence like coin burning, halving, are any big shots Speculations Elon Musk Twitter that is going to buy a bitcoin because to accept for payment to is Tesla car This made market grow crazy and the price went to 60000$ panic buyers to increase the market
Oversold opposite reaction of overbought result in the decrease of the market like over bot over cell can also be influenced by big shots Speculations once again after buying Bitcoin Elon musk tweets that you will not accept Bitcoin for his Tesla car payment because it is not economically friendly.is made the market go crazy in downwards now we can see the Bitcoin is almost at 40000$.
Regulations:-countries have not yet taken clear steps on cryptocurrencies, counter rules on cryptocurrencies can affect the value of cryptocurrencies yesterday evening China has announced that they have banned Bitcoin which also influence the market the Bitcoin is almost at 35000$. like this counter rules on cryptocurrencies can affect the value of cryptocurrencies.
Wales:-Wales means they hold the biggest part of cryptocurrency if they sell or buy the market is affected by their entry
4. Why can't everyone be a miner?
Before I answer this first let us know what is mining Miner use special equipment like GPU CPU AISC to clear the blocks using that equipment they will produce MH/s using that MH/s they solve the puzzle for verifying our transaction. there will be multiple puzzles in a block clearing all the blocked will earn a reward for them for example miners get 6.25 BTC per valid block.
There are different categories of Crypto mining independence upon the cryptocurrency which category is used on
- CPU mining.
- GPU mining.
- ASIC mining.
Proof of Work a miner can mine according to types of equipment like ASIC, GPU, CPU,
This is my opinion everyone cannot be a miner because the Silicon price has gone very high because of that the mining products Rises significantly very high for example 1660Super price was 230$ now its price is 550$ ASIC price of are very high to afford by everyone and electricity is also a main part of mining if electricity cost very high in the place with the minor is located then the mining is not profitable therefore the miner cannot my coins.
In mining, there are so many technical problems that a miner should able to solve the technical issues, mining reward fluctuations the reward can be changed from time to time depending upon the market if there are so many transactions the reward will be high if the less transaction is made the reward will be less. meaning is set by a loan or any other means it will be very difficult to make a profit when the market is giving less reward.
Proof of stake a miner can mine according to how many cryptocurrency coins they hold consensus this algorithm need miners to hold a certain amount of cryptocurrency coin to be eligible for mining the cryptocurrency on the network. not every person can take a certain amount of cryptocurrency.
5. Why can cryptocurrency transactions be called more transparent?cryptocurrency transactions are called more transparent because of blockchain technology, all transactions that are carried out on any cryptocurrency verify by miners and store in the blockchain, not only the person you send and you can see the transaction but every person in cryptocurrency can treat the transaction
for example, if I send a 1 BTC to another person not only that person can see the transaction you can see but everybody in cryptocurrency or have knowledge of cryptocurrency can visit the certain blockchain of that coin to see the transaction, this is not possible in a centralised system because in the centralised system the person who sent and the person who receives the fund can see the transaction other than that nobody can see the transactions
Blockchain technology makes storage of transactions and transfers in cryptocurrencies. Therefore, Blockchain technology is designed to make transactions more transparent this why cryptocurrency transactions are called more transparent.
6. Explain how the development of cryptocurrency in your country?I am from India I have known cryptocurrency since 2017 in 2017 there were no restrictions of transaction in cryptocurrency to banks but On April 6, 2018 reserve Bank of India has announced a cryptocurrency ban in India.
this ban made Indian cryptocurrency users get panic and the market was so unstable and there wasn't any way to buy or sell cryptocurrency there wasn't any development till March 2020 removed the ban andthe Supreme Court of India it is illegal to buy and sell the cryptocurrency in India but there is a catch the Indian banks are which are registered in India will not do any transactions with cryptocurrency platforms, therefore, Peer-to-peer (P2P) developed to help the Indian cryptocurrency uses.
now in India, there is no clear picture of what is going to be the cryptocurrencies future there are rumours that the Indian government is going to release their own cryptocurrency, and also there are planning to make a new rule for cryptocurrency using in India show for the development of cryptocurrency is going very well in my country
Conclusioncryptocurrency has changed the view of digital currencies and the functions of currencies I cannot be ascertained what is going to be the future of Cryptocurrency the cryptocurrency is going to change the future because it is a very fast and transaction very transparent very security and centralised system doesn't offer much opportunity like it is stuck but in cryptocurrency or decentralized network there is a lot of opportunities and explore to make the person who has an idea can implement in cryptocurrency something new out of it like steemit cryptocurrency is going to change the view of the world in few more years.
Hi @bharath-raj-m, Thanks for submitting your homework
Feedback: You have completed every point and you have understood the basics of cryptocurrency
Rating: 6