Steemit Crypto Academy Contest / S2W1 - How Cryptocurrency has shaped the Financial Realm. What is its Future? by @simonnwigwe

Hello my fellow steemians, it is a pleasure to be among you guys once again in this season 2 of the steemit engagement program. This happens to be the first week of the engagement challenge and I am so delighted to be part of the participant. This week we have as always a very unique topic with the title How Cryptocurrency has shaped the Financial Realm. What is its Future? I will be discussing my understanding of this topic in my blog below. Let's get started.

The word cryptocurrency is a combination of two words crypto which comes from cryptography and the next word is currency. Before I explain what cryptocurrency is all about, I will want us to firstly understand these words individually.

Cryptography: Is seen as the way information is been secured so that only the sender and the receiver have complete authority over the communication or information. Most times, our messages sent are not secured enough and before it goes to the receiver a lot of people have gotten it, hence cryptography is a technology that helps to secure this communication from unauthorised users.

Currency: This is the word that is used to describe a generally accepted medium of exchange in a country. Whenever buying or selling of any commodity is to be made, the parties involved have to use the currency as a medium of exchange. Take for instance, if a man meets a Biscuit seller, he collects biscuits and gives the seller currency. This currency is anything that is accepted by all for the exchange in question.

From the two explanations above, we can conclude that cryptocurrency is a digital currency which is used to perform transactions of goods and services. This cryptocurrency is different from our physical fiat, I.e to say we can not hold it in our hands. The essence of cryptocurrency is to tackle the drawbacks of the normal fiat that is been controlled by the government and financial institutions.

The reason why cryptocurrency is created is so that people can have complete authority over their assets. Cryptocurrency is stored in a wallet which is present in most exchange platforms, this wallet has a unique key that you alone have and if this is misplaced, your asset is gone as well. Trading this asset is just between buyer and seller, no control by banks or financial institutions of any kind is present.

The first cryptocurrency is Bitcoin and it was first created in the year 2009. With the help of this creation, a technology called the blockchain technology was created where the system works in a decentralized manner and transactions are transparent, easy and even faster.

Blockchain is a distributed ledger where all the transactions of cryptocurrency are recorded. Every transaction in the blockchain is transparent that it can be seen by anyone anywhere around the world. There are currently thousands of this cryptocurrency apart from Bitcoin. More cryptocurrency that exists today includes steem, Tron etc.

There are many similarities as well as differences between cryptocurrency and conventional currencies. From my explanation above I have stated clearly that they both are used as a medium of exchange but they may have different modes of operation. So we are going to firstly look at the similarities between them before we look at the difference between them.

a.- Both the cryptocurrency and the conventional currency are used for exchange purposes.

b.- Both the cryptocurrency and the conventional currency serves as a digital asset in their capacity. Though conventional currency can be handy.

c.- Both the cryptocurrency and the conventional currency value can appreciate or depreciate based on the economic situation of the country at the point in time.

The difference between cryptocurrency and conventional currencies can be seen in the table below.

There are many innovations associated with cryptocurrency among which include security, decentralization, privacy, total control of funds, making the transaction easier and faster etc. I will discuss in detail a few of the ones I have mentioned below.

a.- Security: One of the aspects that make cryptocurrency stand out is the part of security. Crypto assets are normally secured with end to end encryption which can not be easily accessed.

b.- Decentralization: Here we look at the main concept of cryptocurrency where transactions can be done between two persons eliminating a third party as it is in the case of a centralized system which is used by conventional currencies.

c.- Privacy: Your privacy is secured as no one has any control over your asset since no one has your details even at the point of account creation all of your information is kept secure.

d.- Faster Transaction: Cryptocurrency transactions are faster than our conventional currency transactions. Immediate you send in an asset, no matter the distance, it will take just a few seconds or minutes to arrive.

e.- Total control of funds: Having your keys means you are totally in charge of your asset. No one has any control over your asset unless the person has the key. The person who has the key has the asset.

Despite how tempting the innovation brought by cryptocurrency is, there are still some downsides to the currencies and I will be listing a few of them below.

a.- Irrevasible transaction: In cryptocurrency transactions, mistakes are not allowed. The reason is that if you send your asset to the wrong address, the asset can not be recovered. So every transaction that is wrongly done can not be undone.

b.- Instability of price: The most volatile market in the world is the crypto market. The price of an asset here is never stable at all. This instability can make you reach or poor within minutes or hours or even days as the case may be. Let's take for instance the issue of the Luna crash.

c.- Loss of funds: If you lose your keys, you have lost your asset. I remember when I started newly, I lost the key in my Tron wallet which has about 5k TRX because I could see the key to the wallet.

d.- Cyber attack: There is a probability of heavy loss if the exchange wallet is attacked by hackers because the asset stolen won't be paid by the exchange wallet instead all users will share in the loss.

Well, to handle problems of cryptocurrency I.e the downsides highlighted above, we can follow the following steps listed below.

a.- In the case of Irreversible transactions: I think a username option should be added to the wallet address such that once the wallet address is entered, the username displaces and if that is not the user you intend to send to you can cancel the transaction, in this way a lot of people won't make the mistake of sending asset to wrong addresses.

b.- For Instability of price: Cryptocurrency should be made stable, though a lot of currencies have their stable coin pegged to the US dollars and the price of an asset should be given a range of movement for example the price of steem should always move between $1.7 to $2.0

c.- For loss of funds: The keys of the asset should be made recoverable just like a password can be recovered let the keys of the crypto asset be recovered as well so that if any unforeseen circumstances come we can recover our accounts.

d.- For cyber attacks: There should be an alarm just like a fire alarm if for any reason the system discovers any malicious thing coming into the system. Software to dictate this cyber hacker should be developed so that when they are trying to attack we will try to block them.

Yes, I believe in the future of cryptocurrency. As we have seen, cryptocurrency came in in the year 2009 with only bitcoin as the only cryptocurrency and from that period till now we have recorded thousands of cryptocurrencies. It means that the world also believes in it. Though a lot of countries have not accepted the currency yet it has helped to shift the economy of the world at large. Based on the advancement of technology, the world is moving gradually into a new era and I want to believe that with time in this new era no one will be using the conventional currencies anymore because they will be outdated.

I recommend that everyone cryptocurrency the moving train because the cryptocurrency has come to stay and that is for sure. Also, I will love the blockchain technology to be more flexible such that keys can be recovered, and transactions can be verified by the sender using a name instead of just the address before sending will take place.

The essence of cryptocurrency is to eliminate the third party present in the transaction and to keep our transaction safe and our assets completely out of control. This movement started with bitcoin and today we have thousands of other cryptocurrencies in the world. I believe cryptocurrency has come to stay based on the advancement of technology we are approaching. Soon the old modern exchange and transaction will become outdated and the new cryptocurrency will completely take over.