Crypto Academy Season 3 Beginners' Course - Homework Post for Task 3: [Bitcoin, Cryptocurrencies, Public chains]
Hello everybody. This is my third homework task in this beginner's course presented by Prof. @stream4u.
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What is Cryptocurrency and How You Would Like To See Cryptocurrency In The Future?
What is Cryptocurrency?
In lay man’s terms, Cryptocurrency can be defined as a virtual form of currency that has no physical existence. The financial transactions involving cryptocurrency take place on a decentralized blockchain platform digitally over the internet.
Since it is decentralized, cryptocurrency transactions has no mediator agencies, viz. banks. It is a direct peer-to-peer operation. Moreover, the transactions are highly secure, lightning fast and involves minimum fees to be executed.
Another important aspect is that there is no time bound limitation to complete transactions. Since it is done digitally, therefore it can be done at any place and in any time with proper internet connectivity.
A user’s crypto-wallet is protected by a public key (secures account address) and a private key (gives access to financial transactions). The keys are required to be backed up very carefully at the user’s own discretion. Once the keys are lost, the cryptocurrency tokens stored digitally cannot be recovered forever.
Just like our regular fiat currencies, viz. US Dollar, Japanese Yen, Indian Rupee etc., a number of cryptocurrencies are in circulation today, like Bitcoin, Ethereum, Tether, Steem, and so on. However, Bitcoin was the first cryptocurrency to be introduced in the cryptoverse.
How You Would Like To See Cryptocurrency In The Future?
I came to know about cryptocurrency in 2018 when I heard about Steemit and Steem. Back then, I didn’t pursue it seriously. In April 2021, I renewed my interests in cryptos.
Come July, I will be completing three months in Steemit and I am happy I have learnt the basics in the past 90 days. So now I try to dig into every possible opportunity to learn about cryptocurrency, everyday.
Proponents of cryptocurrency see endless possibilities whereas critics think it’s a risky affair. For me though, I think we are in for an exciting future, provided some issues are addressed to the core so that the entire cryptocurrency system can be made full proof but it's going to be challenging.
Here’s how I would like to see cryptocurrency in the future ----
Regulatory body needs to be set up which can verify transactions and remove the ‘anonymity’ of users so that cryptocurrency doesn’t become the preferred tool for pilferage of funds for anti-social activities. Or else, there might be a total ban on use of these virtual tokens.
Another point to note is that with increasing popularity, they are bound to attract more scrutiny and regulations because Governments and central banks obviously would not want to allow such a decentralized mechanism to run freely under their noses. So they (crypto platforms) need to be very careful not to cause any headache for the authorities. The cryptocurrency platforms and exchanges should have strong protocols of their own in place so that users don't fall prey to hackers which could bring in the state authorities to intervene.
Volatility of the market is a big reason to worry. According to reports, China played a big role in cryptocurrency crash in 2021. This came after several of China’s state-affiliated financial institutions raised concerns about volatility of the cryptomarket and directed local service providers to cut down crypto services.
May be efficient use of fiat-backed or commodity-backed stable coins could be an answer to this problem. When crypto tokens are going down, people can switch their assets to stable coins and move them back once the value of their preferred cryptocurrency stabilizes.It is noteworthy that around 70% of crypto mining around the globe is credited to Chinese miners. Now as a result of the recent sanctions, Chinese mining operations have been on hold. While some have dropped the business, others have decided to move out to Central Asian countries to resume operations.
If stable coins become efficient, governments won’t be worried by market volatility. As such, sanctions will not be applied on miners.
That's all for this task. Thank You.