Crypto Academy Week 14 - Homework Post for [@levycore [ Indonesia ] - assisted by @alphafx [ Nigeria]]
Below is my submission on the assignment
Bitcoin was initiated some years ago and it was the first cryptocurrency that initiated peer-to-peer transactions, what it means is that it doesn't involve any third-party business or any intermediaries. It is through the blockchain network that introduced Bitcoin and it associates cryptocurrencies into this era apart from certain abilities and makings. Now let me elaborate on the differences between cryptocurrency as a decentralized system and a conventional financial system like a banking system. In a conventional financial system since every transaction is approved and managed by a third party, normally transactions delays since they need to pass through various validation processes before it is been approved and accessed, but with the cryptocurrency, nothing like intermediaries, when you are ready to do a transaction, is the matter of knowing the person you are doing the transaction with, within seconds you are done. Another thing is that not everyone can do a transaction in the conventional financial system because it has limitations in terms of age limit and other matters. But in cryptocurrency there are no limitations, transactions can be made by anybody, everywhere you find yourself no matter your age limit provided you know how the blockchain system works.Question 1
What is the fundamental difference between Cryptocurrency and the conventional financial system?
In the traditional financial system, it involves so many charges and deductions even when transferring it from one geographical area to another but with the cryptocurrency, it doesn't involve any charges and when it comes to transferring it from one person to another person it is very fast a secured
Question 2
Why is a decentralized system needed?
In this technological environment, systems are built using any of these three network architectural approaches namely; centralize, decentralized, and distributed systems.
Blockchain networks use the decentralized approach in managing their resources. With regards to the decentralized system, the decisions are made by various levels/users of the system. This means users determine the method and the processes they should go by in managing their resources. Decisions are not taking by any single authority.
Why the decentralized system approach is very important.
- Decision-making is quick on time and response too is very efficient.
- Very secure and safe since every person in the blockchain network has his or her private key.
- Has no limitations and open to everyone.
- Doesn't require any central system, each user can easily connect with another user without getting any permission from anyone.
- Decentralized systems are operated every day, no matter the time, day, or minutes, unlike traditional financial systems where they don't operate on weekends. This decentralized system works 24/7.
Question 3
What affects the value of cryptocurrencies?
Cryptocurrency has been accepted and has been in operation in many countries and is an extensively decentralized digital currency and due to this, its value is affected by many influences. One thing is cryptocurrency price is not determined by any central government, people, or anyone because of its nature. Digital currencies have been accepted in some countries why in other countries it is illegal. Bitcoin in recent times has been fluctuating either up or down due to the following factors.
Demand and Supply: In-demand law, states that the higher the price, the lower is demanded and the lower the price the higher the item is demanded and vice versa to the supply, so when the demand of the crypto is increased and the supply is inadequate then the value will rise.
Power of the media: General public gains more knowledge about cryptocurrency from the media and we are also in a digital world. In this digital world, information is spread faster than usual so when the public gets to know more knowledge about cryptocurrency and get themselves involved, then the value also tends to change, either at a reduced or increase state.
Competition: The first and foremost cryptocurrency that was introduced to the universe is bitcoin and since its introduction, many other cryptos had also emerged and they are all trying to get favor in the eyes of its users or contending considerations, due to this, the price can be affected.
Question 4
Why can't everyone be a miner?
Bitcoin uses a process called mining. Before one can settle and gain in cryptocurrency, he or she needs to mine and mining involves a whole lot of processes. What is mining? Mining is the process of creating a block of nodes in a blockchain network.
It is the miner who creates the blocks and this involves many processes and methods as well as resources and equipment. Not anyone can be a manner.
- Not all countries accept cryptocurrency and for that matter, not everyone can be a miner. In some countries, crypto is prohibited.
- Before someone can be a miner, he needs to be educated because there are some technicalities in it as to the kind of technology and the process involved.
- Mining involves the use of computing resources, power, and also electricity and such things are expensive.
Question 5
Why can Cryptocurrency transactions be called more transparent?
All crypto happens in special databases and is arranged in a block and can be easily tracked. Blockchain is private, secure, and also transparent. Every transaction can be traced on the blockchain network. The address which initiated the transaction can be tracked using a special tracking method and it can track the first crypto block back. The blockchain also protects its user's identity by covering it using unbreakable cryptography. What it means is that individual users cannot go to the linked blockchain address.
Question 6
Explain how the development of cryptocurrency in your country?
It was very sad when hearing news from Ghana Security and Exchange Commission putting band and warning people to desist themselves from trading cryptocurrency. The central bank of my country does not treat it as a form of payment, it is not legal tender.source
Apart from the ban and other methods they have initiated, people in my country are day by day getting themselves involved in cryptocurrency in my country. There are some offline shops in my country that accept cryptocurrencies and I know it will merge and one day our leaders will accept it as a legal tender.
In conclusion
Cryptocurrency has found its root in this universe and nothing can we do to find its exit. I might say that cryptocurrency has help most individual investors to gain and do business. I can say that crypto is a quite safer way to send and received money and it is trustworthy too. Since it method used is decentralized, it becomes very flexible as compared to the conventional financial system. I am praying that one day, my country and also the whole African countries will welcome cryptocurrency to make the standard of living good and easy as well. Thank you once again professor @levycore for this wonderful lecture. God bless you.
Hi @banapat (, Thanks for submitting your homework
Feedback: You have completed every point but, You are still lacking in explaining each point ,next please do more research for your post
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Thank you for your rating and scores as well. I hope to improve and build better points in your coming lecture