I welcome you all to season 2 week 1 of the steemit engagement challenge. The engagement going on between 7 different communities has kept me busy because I always have something to read and write about. Today I want to drop my entry into the crypto academy community which happens to be one of the communities selected.
In this week's contest, the academy contest wants users to explain in their own words how Cryptocurrency has shaped the Financial Realm. And also what is its Future? The explanation for this contest is contained in this article as you read it till the end.
Users are expected to briefly give an overview of cryptocurrency.
Cryptocurrency can be traced back to its origin in the year 2009. This year the first-ever crypto asset was created I.e Bitcoin. The creation of this asset was aimed at having a digital asset which will serve as a medium of exchange like the conventional currency. From the name cryptocurrency, we can notice that it is also a currency but this time the currency uses cryptography technology to make the asset secured in nature.
This type of currency is not handy, and it can not be stored in our conventional banks, it uses a wallet for its storage. So this wallet gives users only complete access to their token because it uses keys. The cryptography aspect of this currency makes it secure for users who are not permitted to have access to it.
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Cryptocurrency
The main reason why this asset was created is so that the issue of the third party will be removed from transactions between buyers and sellers of goods and services. Recall that in our conventional banks, the banks stand as a gap or middlemen between buyers and sellers of assets. This means that some transactions may take a longer time to execute because the bankers are busy attending to other things. The case of cryptocurrency is direct from buyer to seller and vice versa.
Cryptocurrency is traded using the peer-to-peer format where a buyer communicates directly with the seller and both carry out their transaction. The transaction of cryptocurrency is done via blockchain technology. Here all the transactions are stored in the blockchain. So whenever this transaction is done, it will be validated in the blockchain and executed.
In summary, we can see cryptocurrency as a digital asset that is highly secured and is built and transacted using blockchain technology. The transaction here is done directly between buyers and sellers without a third party involved. This asset is only traded online.
Draw a comparison between cryptocurrency and conventional currencies.
Comparison has to do with similarities and differences between cryptocurrency and the conventional currencies, below I listed a few of the.
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Conventional Currency
Similarities between the both
They are both used for the exchange of goods and services I.e to purchase goods and also pay for services rendered.
Economic condition of the world or country normally affects them both
They are both used as digital assets I.e it can be transacted electronically between their users.
Differences between the both
Volatility is a key feature of cryptocurrency whereas the conventional currency is normally stable. This means the values don't change but that of cryptocurrency changes.
Cryptocurrency can be used only online but the conventional currency has dual ways of usage I.e online and offline.
Cryptocurrency has not been generally accepted by all but our conventional currency has been generally accepted by everyone.
Explain the distinctive innovations of cryptocurrency and their downsides.
Decentralized finance (Defi): This is one of the cryptocurrency innovations in which a technology called blockchain is used to carry out all the transactions in a decentralized manner. This means that transaction here is carried out between buyers and sellers directly without the interference of a third party. The decentralized finance innovation came to do away with all the former means of transaction where users have to wait for a third party to give go-ahead for the transaction to be executed. This makes transactions faster, secured and more reliable.
Non-fungible tokens (NFTs): This is another trending innovation of cryptocurrency which is currently making headway in the cryptocurrency market. NFTs are tokens that are present in the very unique blockchain I.e they are not replicants at all. Examples of this NFTs token can be artwork, music, painting etc. These NFTs have no replicate of themself anywhere at all and that is what keeps the price higher. It may be owned by one person or a group of persons.
Smart Contract: Another powerful innovation of cryptocurrency is smart contract innovation. The smart contract has to do with artificial intelligence where the computer has been given a series of instructions to work with. Here the system checks certain criteria and if it meets the requirement, then the trade will be executed otherwise the trade will be declined. Considering the number of people performing crypto transactions in a second and for their assets to maintain the attribute of being fast, it has to work with a smart contract.
Downsides of the innovations of cryptocurrencies
Irreversible transaction: Any transaction that has been sent wrongly can not be reversed and that will lead to a loss of funds since it is just between the buyer and the seller.
Another downside of the innovation is seen in the part of NFTs that can not be replicated and that will make the asset very expensive.
Another downside is seen in the part of the smart contract where only criteria that both parties meet will trigger the transaction execution and they both can not adjust to suit their test.
How do you think major problems with cryptocurrency can be handled? Let this be a response to the downsides highlighted earlier.
The problems of the irreversible transaction can be handled if a little hold of confirmation is made before the trade execution. This may delay transactions but it will be safer because when you click on execute the transaction, before adding it to the blocks of transaction let there be a message asking for confirmation so that you can confirm the address properly and if there is a mistake you can click on cancel to send asst back to your wallet.
NFTs should be made replicable so that they don't become too expensive to afford. Let it be like normal currencies such as TRX, XRP etc. If it is made this way, a lot of people will be able to afford the asset.
Smart contracts should be made in a way that the rules made for the system to operate, can be modified by the members who wish to use it. Take for instance the rule says unless 10USDT before I can trade with someone, it should be made in such a way that I can modify it to look for someone ready to buy just 2USDT. All I need to do is to adjust the rule to meet my criteria.
Do you believe in the future of cryptocurrency? State your reasons. Any Recommendations
Yes, I believe in the future of cryptocurrency. The reason why I believe in the future of cryptocurrency is that it is an innovation and whether we like it or not the world is fastly moving and a lot of things are changing and including technology. Before this time, history has it that there was no money, we use cowries for the transaction of goods and services but with the invention of conventional currency, the cowries era has been eliminated.
In the same way, cryptocurrency innovation has come and it is gradually replacing the use of conventional currency because it has been legalised in so many countries today. The conventional currencies can be used only in our local countries but the cryptocurrency is a universal token that can be used anywhere at any point in time. You need not change it to any currency before usage.
Cryptocurrency has come to stay and for that reason, I will recommend that people should embrace it now before it becomes too late. When bitcoin came into existence I taught it won't work but today 1BTC is sold for so many millions of naira. If I had gotten few as of 2011 when I heard about it, today I could have become a very bigger person in society. So cryptocurrency is the future, the earlier we embrace this the better for us.
Conclusion
In the nearest future, we may not be using conventional currencies because cryptocurrency has come to stay. As we can see the essence of crypto is to be a currency that is generally accepted by the entire world and that is where we are moving to. I want to invite
@rad-austine,
@goodybest and
@samuel20 to please join this contest.
Thank you for publishing an article in the Crypto Academy community today. We have accessed your article and we present the result of the assessment below
Comments/Recommendation
Thank you for participating in this contest.
Total|7/10
Thanks professor for the wonderful and honest review
Upvoted! Thank you for supporting witness @jswit.
Please check my new project, STEEM.NFT. Thank you!
Yes we can do P2P deals with the help of cryptocurrency that is a great invention. In crypto market we do not need the help of a third party person. You explanation about crypto is very good i like it. Remaining things are also discribed accordingly. Thanks for sharing with us..
Regards:
@malikusman1
Thanks for your comment
Assalamoalaikum
Bro you make an impressive post and you have all the necessary knowledge of crypto.
You're right that NFT is one of the major outcome of crypto. Actually Crypto is the name of Innovation.
GOOD LUCK BRO
Thanks for your comment