(Repost) Steemit Crypto Academy Season 5 Beginners Course - Task 5: Bitcoin, Cryptocurrency, Public Chains- written by @moiz25
@shemul21 please cure my post.
Hello, dear steem friends of this great community of learning. I am really very happy to become a part of this community by completing fixed homework tasks for beginners. Today I am writing the 5th homework for professor @stream4u which is related to Bitcoin, Cryptocurrency, Public Chains.
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Here are the Questions:
What is Bitcoin?
First, I will tell you what bitcoin is, let's do a preliminary study of money, money is just a medium of exchange for the value that is being created. You can only earn money if you do something, money doesn't fall from trees or sky. Money is also used to buy goods. Throughout history, money, which is a symbol of value, has taken many forms. Many materials have been used to represent money, such as shells, metal, snails, gold, etc. They have been used in the past to serve as a medium of exchange i.e. money.
However, for something to be of value, one must believe that its value is trustworthy and has long-lasting durability. Until 100 years ago, we always relied on something to represent money. A change has taken place which drastically reduces belief in something and trust shifts towards someone. For example, for a long time, people felt uncomfortable walking in gold bullion, metal, or even cowrie. So this led to the invention of printed money, that is paper money.
This is how it works, you will take your $10,000 worth of gold to the bank or government, the bank will give you an invoice for $10,000. Paper money is seen as the ultimate solution to the initial problems brought by Gold, such as paper is easier to transport, also easy to spend, you can also take your money to the bank and keep it there as long as you want. So people use it as money as an instrument of practicality and convenience.
Due to many microeconomic changes, paper money has become disconnected from gold in terms of value. Then the government came to the scene properly, telling the people that they would determine the value of the banknotes. So people agreed with what the government said and started trading paper money.
People trusted government promises very well, even when there were no real commodities to back paper money, because it was this belief that led to the creation of FIAT money. FIAT simply means Decree Bye in Latin, meaning that the pound, euro, dollar or other currency has value because the government places it.
Banknotes are now recognized as legal tender, it is banknotes, coins, etc. Banknotes must be accepted by anyone as payment. That is, the current value of money comes from the legal backing provided by the central authority, namely the government. This is how trust goes from trusting something to trusting someone who is the government.
Fait money has 2 main problems that are:
- Centralized real money: There is a central authority that controls and also issues it, namely the government or central bank.
- Fait money is not limited by its quantity: The Central Bank can print as much money as it wants and this can lead to currency inflation. The main problem with printing money is that the more money there is in society, the value of that currency goes down. Therefore, as the years go by, the value of each coin decreases. In a country, where the prices of goods and services are increasing, this may mean that the purchasing power of that country's currency is drastically reduced.
The fact that Fait money exists, the transition to digital money is quite simple. There is already a central authority distributing the money, so why not make money? Digital and authorities keep track of who owns what. This is where the invention of the first cryptocurrency called Bitcoin came into the market, but what is cryptocurrency! Cryptocurrency is a digital currency that allows transactions to be carried out and also to verify and record them in a decentralized system using Cryptography.
Bitcoin was developed by developer Satoshi Nakamoto in 2009, and no one sees it anymore to be the world's first digital currency. Satoshi Nakamoto is trying to create a decentralized digital currency system, which means it is not controlled by the government or any other authority. We can say that Bitcoin is synonymous with money but it cannot be seen or transported about how money is transported. it is done electronically. We can say that Bitcoin is a digital currency, whose transactions are not controlled by any government or central authority. It can be used to buy anything you want. Just you need an internet connection. It works by software and cryptography.
What was the Aim Behind Bitcoin Invention?
The main reason for Bitcoin was created is to decentralize control over cryptocurrency. We know that Satoshi Nakamoto created Bitcoin in 2009, which was a response to the strong financial crisis at the time, and at that time people depended on banks for most of their financial transactions.
So Satoshi Nakamoto came up with the idea to take monopoly power from the bank. He then created a peer-to-peer system that did not require any third party intervention. People now have complete control over money with the introduction of Bitcoin. In this way, banks and other financial institutions are not required for successful transactions to occur. And also to keep the currency value. Coins are sent faster at a very low cost compared to traditional banking systems.
Is Cryptocurrency Good For A Business To accept As Payment? Why?
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As I said earlier, cryptocurrency is a digital currency that is gradually replacing paper-fait (legal tender). Cryptocurrencies are secured by crypto, which helps reduce fake or double spending. Cryptocurrencies include coins like Bitcoin, Ethereum, Dodge, etc, but bitcoin is the first cryptocurrency and ranks #1 in terms of value in the cryptocurrency world. Bitcoin, which is a type of cryptocurrency, is great for businesses to accept as a means of payment for the reasons listed below.
First of all, in business you have complete control over your money, which makes it decentralized. Cannot be charged a certain amount of money, either daily, weekly, or monthly. You can decide to take money with you whenever you want.
You should not go to the bank to queue or go to an ATM to queue to withdraw your money for business. From wherever you are, you can send and receive bitcoins, all you need is a phone or laptop with an internet connection.
Companies don't like procrastination, going to the bank can waste a lot of time. With the comfort from your home, you can transfer and receive payments. This is another reason that makes cryptocurrencies so great for accepting payments. because it speeds up.
Most banks and financial institutions charge large transfer fees, but the fees for cryptocurrencies are much cheaper compared to traditional financial institutions.
The use of bitcoin as a means of payment in business facilitates the conduct of international business. It can be send from anywhere. International transfers are much easier with Cryptocurrencies.
With Bitcoin, you can more easily buy whatever you want to buy, no matter where in the world. Businesses take it seriously and look at it, it can replace fake paper over time.
Bitcoin theft as an entrepreneur is very difficult, because of the high level of security in digital wallets, it is impossible for third parties to access your financial data. There is a very high level of privacy in the cryptocurrency world.
Conclusion
I have answered the following questions. Thank you, professor @stream4u, for making this informative task. This is my second homework task. If I made any mistakes, please comment below. I will try to improve from the next. By the way, thanks for reading my task.
Noted