STEEMIT CRYPTO ACADEMY SEASON 4 - HOMEWORK POST FOR TASK 5: BITCOIN, CRYPTOCURRENCIES, PUBLIC CHAINS || BY @graceyjossy
HOMEWORK TASK:QUESTION 1
What Is Cryptocurrency and How You Would Like To See Cryptocurrency In The Future?
INTRODUCTION
Hello Prof. @stream4u i am excited to submit my homework post for task 5 today on the topic: Bitcoin, Cryptocurrencies, and Public chains. On this article, i will throw more light on the topic.
I will be discusing on what cryptocurrency is, the contents or characteristics that makes cryptocurrencies unique, its usefulness to man (advantages), and what i am looking forward to seeing cryptocurrencies in the future.
WHAT IS CRYPTOCURRENCY?
The word crypto as derived from the Greek word "Kryptos" means hidden, and currency is anything that is generally acceptable and can be used as a medium of exchange for goods and services. Therefore, cryptocurrency is a digital or electronic currency that can be used for transactions and also used to pay for goods and services just like conventional currencies.
Cryptocurrencies are encrypted by cryptographic techniques and are being monitored or maintained by a decentralised system. It is a system that permits secure payments online dominated in terms of virtual tokens represented by ledger entries internal to the system.
Cryptocurrency runs on an open-sourced decentralised digital system of ledger distribution called Blockchain, and cryptocurrencies are governed or managed by a peer-to-peer network of computers on the blockchain, this blockchain database makes it impossible to be hacked. The first-ever known cryptocurrency is the Bitcoin which was discovered by Satoshi Nakamoto in the year 2009, to create a financial system that will not be controlled by the government neither will it work with the Bank system policy.
All transactions made in crypto is been recorded and assigned a unique cryptographic identification number called Hash on the blockchain, and each block on the blockchain represents a separate transaction, and then a copy of the transaction data is sent to other people on the network and all these done without the intervention of middlemen or a third party (otherwise known as decentralisation).
CHARACTERISTICS OF CRYPTOCURRENCY
Due to the uniqueness of cryptocurrency, we will be looking at the features that make it unique.
Usability: You can carry out transactions with cryptocurrency at any point in time because it is very easy to use and access, and also harmless.
Security: Since the history of blockchain, it has not been hacked except in cases of a password breach. This is because the blockchain network is secured or monitored by cryptographic codes that first-grade security on the blockchain. Crypto that our personal information is controlled by individuals, and no external person has the right to view it.
Decentralization: Cryptocurrency is a decentralized system meaning there is no central authority or regulatory agencies that may influence the decision making process during transactions. Therefore, users have all the right to decide on every transaction.
Immutability: Immediately transactions are processed or made on the blockchain, nobody can alter or tamper with the data, because it remains irreversible.
Cryptocurrency can be transferred between two or more people.
In cryptocurrency, there is absolute anonymity or privacy as a users identity is not required before processing and validating transactions. Once transactions are validated by the system, the deal is done not minding not revealing the sender and receiver of crypto.
Cryptocurrency is portable.
TYPES OF CRYPTOCURRENCY
Over 10,000 different cryptocurrencies are in circulation today, each made for different purposes on different blockchains. Listed below are the types of cryptos. :
- Meme coins
Screenshotted from Source
Bitcoin: Is the first cryptocurrency as earlier mentioned. The name of the coin is the same as the name of the Blockchain.
Stablecoins: Its value is constant, it does not change due to market volatility because they are designed to minimise volatility and maximise the utility of cryptocurrencies.
Shitcoins: This is a remark for coins that do not have value or significance. Its creators do not have strong problems which they aim to solve by creating those coins.
Altcoins: Refers to all other coins apart from Bitcoin. They are alternatives to Bitcoin.
Top 10 cryptocurrencies by market cap
Image screnshotted from Source
ADVANTAGES OF CRYPTOCURRENCIES
Protection from Inflation: Inflation has made many currencies to loose their value to decrease with time. At the period of its takeoff, almost every cryptocurrency is released with a strong and fast amount. So, the demand increased, its value increased also, which might make it retain with the market and, within the long run, prevent inflation.
Secure and private: The blockchain ledger depends on several mathematical puzzles, which are difficult to decode, making cryptocurrency safer than normal electronic transactions.
Easy transfer of funds: Cryptocurrencies have always protected themselves as an optimal solution for transactions, since its verification requires little time to process as there are only some impediments to cross.
DISADVANTAGES OF CRYPTOCURRENCIES
Risk of Data Loss: If any user misplaces the private key to their wallet, it can not be obtained back. The wallet will stay locked away along with the number of coins inside it. This might result in the loss of the user.
No refund or cancellation: If funds are mistakenly sent to someone or to a wrong wallet address, the coin cannot be recovered by the sender.
High consumption of Energy: Mining cryptocurrencies requires lot of computational energy and electricity input, making it highly energy-intensive.
HOW YOU WOULD LIKE TO SEE CRYPTOCURRENCY IN THE FUTURE?
I see cryptocurrency as the future of the financial system because there was a time when no one knew what cryptocurrency is about, but as the world advanced into the technological world and cryptocurrency was introduced, the world has never been the same.
I would like to see cryptocurrency move from just an investment phase to a utility Phase where people can use crypto in normal daily transactions such as online shopping, paying for services, etc.
Despite the functioning of cryptocurrency ATMs in other parts of the world, I would like to see widespread use of cryptocurrency Debit cards in the future.
CONCLUSION
Cryptocurrency is the future currency and finance of the world and has gained more populace since introduced into the money market, and will soon be adopted as a means of exchange. It gives equal opportunities to people regardless of race, age or geographical location.
Sincere gratitude to my professors: