Steemit Crypto Academy Contest / S2W1 - How Cryptocurrency has Shaped the Financial Realm. What is Its Future?

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Image made using canva

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Engagement contest season 2 week 1

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Hello everyone and welcome to another day on my blog, I must say it's been a while since I last posted on this community party being because the crypto academy was on a break.

Today we would be discussing crypto currencies and it's impact in morden day activities.

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The term crypto currency has been around since late 1900 century this was a result of economist suggestions of a form of payment which would be generally accepted as a means of payment and free from government intervention.

In as much as this idea was convinced early on they was a problem how could they produce a token which would be safe, decentralised and fast and free of government intervention hence the block chain trillema.

It wasn't up until 2009 when Satoshi Nakamoto created Bitcoin and solved this trillema through the use of proof of work.

Since the creation of Bitcoin the first crypto currency in 2009 we have seen the creation of more than a thousand other crypto currencies.

Presently crypto currencies are now generally accepted as mean of payment in various countries such as El Salvador and is accepted as of payment by various agencies such as PayPal.

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Similarities

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Due to the fact that crypto currency was developed based on the existing principle of conventional currencies they are Soo many similarities between both of them.

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Medium of payment

Both cryptocurrencies and conventional currencies can be used as a medium of payment this can be seen in various situations where we are asked, we would like to pay using cash(conventional) of btc ( crypto).

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Store of value

Both cryptocurrencies and conventional currencies have value attached to them we can clearly say that 1 btc = $28,000.

This is so, because for both currencies to be used as a Medium of settlement of debt they must have some value in other to know the amount which would be used in settling the debt.

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Variety

Just as they exist different currencies for different country such as naria, dollar, yen and others they are also different crypto currencies such as Bitcoin, Litecoin, steemit and others, each serving a unique purpose.

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Difference

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If conventional currencies where perfect they would have been no need for the creation of crypto currency hence they are some differences between the two.

Volatility

The price of crypto token tend to me much more volatile than conventional currencies, it is not strange to see a crypto token drop by 10% in a day but it would be very disasterous for a conventional currency to lose 10% of Thier value in a day.

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Easy to manipulate

Unlike conventional currencies, crypto currencies are prone to price manipulation just like we saw last month when theprice of Luna went from $119 to $0.

This was due to market manipulation, this form of manipulation is unlikely to ever happen to a conventional currency.

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Acceptability

Though crypto currencies are very popular they are still not accepted as a means of payment in so many places and in some countries such as Nigeria they are seen as illegal.

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Control.
Crypto tokens run on a decentralised network while that of conventional tokens run on a central network.

The main aim for the creation of crypto token was because individuals whether some freedom from government control.

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_Answer

The distinctive innovations which seperates crypto currency from conventional currency is its decentralisation.
While conventional currencies relied on a central authority for verifying and authenticatung transaction crypto currency went in a different direction.

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Inovation : Decentralisation

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This is the key concepts which seperates crypto currency from conventional currencies, crypto currencies are roperated by many users rather than a single authority by so doing this it prevents a single authority from having so much power over the currency.

Through decentralisation indivduals are able to enjoy privavcy from the eyes of government institutions, it also affords users of crypto currency a sense of control over the direction of the cryptocurrencies they use.

crypto curencies like steemit offers users the ability to become witness this opportunity is not offered by conventional currencies.

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Downside : scalability and Volatility

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From the need for a decentralised currency came about so many problems such as

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Scalability

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This has to do with the speed of the network, this came about as a result of decentralisation. Normally in a centralised institution decision are made by a single authority and this makes decisions making very fast but in a decentralised institution they need to be a means to make decisions very fast.

The aspect of making decisions on cryptocurrencies is relatively slower than that of conventional currencies.

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Volatility

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In a bid to create a decentralised network which would perfectly solve the blockchains trillema it has led to the creation of various crypto curencies. This crypto curencies are all too volatile due to the constant interaction of the forces of demand and supply this has made it not a good store of value as the prices keeps fluctuating.

Due to the very volatile nature of crypto curencies many government have rejected it as legal tender and means of settlement of debt.

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_Answer

For everything that has a problem surely they would be a solution as earlier stated the main problem in which crypto currencies faces are scalability and Volatility.

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Solving the problem of scalability

The problem of scalability is one of the most difficult problem in cryptocurrency, various projects have come about to solve this problem such as btc, trx, algorand all with different consensus mechanism.

Solana claimed to have solved the problem of scalability with its proof of history consensus mechanicalism which is capable of processing transaction 300,000 per second but with this speed makes Solana the most vulnerable network in my book as it has crashed so many times in the last 6 months which has seen its price drop from $150 to $36 as at today

In my opinion the scalability aspect would forever remain one of the trillema problems of Block chain.
You can't have a network that fast and decentralised.

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Solutions to volatility

The one simple way to stop the issue of volatility in the crypto market is to prevent individuals from holding a large amount of cryptocurrency which is capable of shifting the dynamics of the market, by limiting the amount in which individuals can buy and sell at a particular time it prevents market manipulation and unpredicted price changes just as we saw happen in Luna.

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Yes I strong believe there is a future for crypto currency, this is because crypto currency solves the problem of decentralisation.

Though the market might be in a bearish session but by looking at the historic price action movement we can see that the market moves in pulses on its way up.

So yes the market would could continue dipping that doesn't change the fact they are many people who value the decentralisation which crypto currency provide and this would ensure that in the long future crypto currency would remain relevant.

What I strongly feel would happen in the future is that all those crypto curencies which do not solve any problem being faced by individuals would slowly fade away over time.

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I had Soo much fun answering the questions presented to me and I believe that all this who read this work would gain a thing or two from this.

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_{I would like to invite @swaylee @ronindboss and @mato445 to participate in this contest}

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