Crypto Academy Season 3 Beginners' course - Task 3 : Bitcoin, Cryptocurrencies, Public chains by @ahsanjawed
Hello everyone and Welcome to my Task 3 Post of Crypto Academy Season 3 Beginner Course
Homework Task (Q.1)
💠 What Is Cryptocurrency?
Cryptocurrencies have the potential to function as a monetary system. Its value is not determined by the construction material, as is the case with silver or gold, nor by any government or institution; rather, it is determined by supply and demand, therefore the cryptocurrency's worth is determined by the price at which it is willing to pay. persons who are paid.
As previously said in prior articles, the greater the interest in cryptocurrencies, the higher their value will rise. Bitcoin was the first cryptocurrency to arise and build up a new market sector. However, there are thousands of cryptocurrencies available today. It was given that name due to its encrypted nature, which means it is protected by a set of keys. This makes them incredibly appealing because they are impossible to steal or hack. Transferring money has expenses and intermediaries; however, with cryptocurrencies, the cost per transfer is low and the transfer is instant. Furthermore, these are transactions that are carried out anonymously.
It was all brought about by the financial crisis of 2008. Satoshi Nakamoto was a person or group of persons who came up with the idea of combining technology and the internet to try to break free from the system. When I say "system," I'm referring to the banks and governments that are in charge of centralizing everything. Satoshi devised a mechanism that allows a person to move money from one location to another without the need for an intermediary. There is a category on the internet called the internet of value, where bitcoin, the cryptocurrency that revolutionized everything, is cataloged. So much so that some people refer to it as the current economic revolution on the internet.
Although electronic money existed, banks have always been required to transfer funds from one person to another, and banks have always kept a commission. That is why cryptocurrencies employ blockchain technology, which is a completely decentralized system in which each transfer is allocated a block name and an unrepeatable and unique code is formed. The network of users that are utilizing that system registers and validates that block or transaction for all time, and it is simple since anyone in the globe can have a blockchain program on their computer or mobile phone. That is, all users have access to the specifics of those transactions and may verify that the "money" exists. A block is generated when a transfer is made, and that block links other blocks or transfers to form a chain of blocks. As a result, the community, which is made up of thousands of computers networked all over the world, takes the position of governments and intermediary banks.
Cryptography is particularly secure since it is based on sophisticated mathematics. A miner may validate a transaction incorrectly, but with hundreds upon thousands of miners validating at the same time, the chances of this happening are slim to none. The people who own these computers are known as miners, and the blockchain contains a decentralized network of computers that confirm actions. You've probably heard the term "mining bitcoins" before. Mining bitcoins used to be simple, but that has evolved. The worst thing about bitcoin is its volatility; it fluctuates 100 percent of the time and so is not stable at all, as evidenced over time.
It was launched in 2009 at $ 0.01 per bitcoin. When it all started, only a few people were interested, but as time went on, the number of investors increased. To give you a sense of the price, they were $35 in May 2011. Then they dropped again in 2012, stabilizing between 2 and 15 dollars. As a result of this, the cryptocurrency gained popularity in the Asian continent, causing its price to grow. In June 2013, it hit a high of 202 dollars. And it wasn't its high point; in September of the same year, it hit 1203 dollars, which was news that the world's financial systems took notice of and prompted numerous countries to take action. As an example, the Chinese government has banned the use of bitcoin as common money, and the Argentine Central Bank has also stated that bitcoin use is prohibited. This instilled dread in several users, prompting them to sell their bitcoins. As a result, its price dropped to $ 500; yet, some governments eventually accepted it. Like Barack Obama, who declared Bitcoin a national currency in 2016, allowing cryptocurrencies to flourish. The news concerning cryptocurrency has gotten to the point where strange things have happened, such as the world's most costly pizzas. Do you know who she is?
Laslo Hanyecz stated on an internet forum in May 2010 that he would pay 10,000 bitcoins for two pizzas. Many users mistook it for a prank because bitcoins were not particularly valued at the time, and many ignored the message. After all, was said and done, someone accepted the business and made the transaction. The pizza purchase was the first time bitcoin was used as a payment mechanism. Months later, the cryptocurrency's price began to soar, and users recalled the pizzas' publishing. In May 2020, the amount that man spent on two pizzas would be worth more than $ 90 million. As a result, they're generally referred to as the most costly pizzas ever. It was even declared Bitcoin Pizza Day on May 22.
This unusual sale also highlights the previously mentioned instability: when a person decides to buy bitcoins or another sort of cryptocurrency, he does so with the expectation of making a profit or escaping the traditional monetary system. But it is at that same moment that the price falls, resulting in losses. When bitcoin became popular, numerous firms, like Facebook, wanted to create their own cryptocurrency, which gave birth to Libra. This allows the company's millions of users to swap currencies within their platforms, with actions as simple as purchasing items on the marketplace. It had the potential to create a system akin to the banking system, and as a result, banks and governments were quick to criticize it, despite the fact that it was founded with immense force and enthusiasm. It appears that as a result of this, the process of developing a parallel system has been altered and adapted, and the aims are now different.
All of this has required traditional banking to rethink and reinvent itself, despite the fact that, as we all know, it is a system that will not go away. As I previously stated, the bitcoin market is quite volatile. It has had numerous price dips, prompting investors to sell their cryptocurrencies in order to protect their funds.
Tokens, a very old figure, reappears in a contemporary digital environment. A token is a digital representation of everything that exists in the real world. It could be a property, a stock in a firm, a collectible, or anything else. Tokens enable users to buy or pay for services over the internet by facilitating trades or transfers. People began transferring tokens from other projects in a secondary market after the bitcoin revolution. When prices began to fall, some consumers felt compelled to switch their cryptocurrencies for more secure ones while remaining in the digital realm. Stablecoins, another figure we'd want to discuss with you, were born there.
Stablecoins are stable coins, as the name implies because they are backed by certain guarantees. This means that you can participate in the crypto world as a user, but you should be aware of the volatility of cryptocurrencies like bitcoin. All of these strategies have resulted in a collection of tokenization infrastructures. To put it another way, we can have any good in the digital world, store it on a blockchain, and exchange it. We have the technology, the currency... but we lack the regulation, which the experts appear to be working on. For you to comprehend its significance, imagine being able to purchase a small piece of a Picasso painting. He might not be able to obtain the complete artwork, but he could be able to obtain a section of it.
We've seen memes become cryptocurrencies, such as Dogecoin, which began as a cryptocurrency with no defined aim and has since evolved into a legitimate enterprise.
Even though bitcoin is a relatively new technology, we have seen how it has grown in popularity in the year 2021. People are gradually losing faith in existing banking institutions and migrating to the decentralized blockchain, but they still have a long way to go. There's still a long way to go.
Today, we continue to witness how governments and banks oppose the usage of cryptocurrencies and impose harsh sanctions, causing the price to fluctuate; a recent example is what occurred in China.
My aim for cryptocurrencies in the future is for them to be accepted all around the world, but governments must first realize that this system is here to stay and integrate it into society. Currently, millions of individuals are unaware of the subject, necessitating the creation of educational courses to progressively disseminate information on the use of cryptocurrencies and how they can alter the way we view the economy today.
I'd like to see cryptocurrencies used in everyday activities like paying rent, energy, and water, among other necessities. In addition to being able to use them for monetary transactions, they can also be used to pay for items.
Although small and large businesses in my country, Venezuela, are gradually adapting to the use of cryptocurrencies, there is still a long way to go. Although services and taxes can be paid with a centralized cryptocurrency called PETRO, this currency is not classified as a true cryptocurrency because its price is set by the government; however, it is a step into the era of cryptocurrencies.
Cryptocurrencies are a new, safe, and efficient means to exchange goods and services that, because of their decentralization, flexibility, and liquidity, have a significant impact on the global economy. However, in order to benefit from the advantages of electronic currencies, you must first educate yourself about the industry. Similarly, we must be prudent and aware that security can always be breached (as evidenced by recent examples), and that while digital currencies offer a high level of protection, nothing is completely secure.
It is critical to underline that, as previously stated, the price of these digital currencies is extremely volatile, and that there are external factors that cannot be controlled, resulting in the possibility of winning a lot one day and losing everything the next.
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Hello @ahsanjawed , I’m glad you participated in the 3rd Task of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:
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Thank you so much
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