Ques 1. What is the fundamental difference between crypto currency and conventional financial systems?

The fundamental difference between a crypto currency transactions and our conventional financial systems is that the former is decentralized while the latter is centralised.

Decentralization means that there is no Central authority like the central bank or any other agency of government that controls or regulates transactions on the blockchain. Every individual has a role to play on the blockchain since they can monitor transactions by themselves. In addition, it is not susceptible to hacking since there is no Central network.

Furthermore, crypto-currency transactions are virtual that is to say that the currencies are not tangible. The currencies are represented by codes. They are also limited in supply. For instance, the total Supply of Bitcoin is capped at 21 million coins. This means that we cannot have more than this amount no matter the demand for Bitcoin. This is how crypto-currency gets its value.

On the other hand, our traditional financial institutions are centralized. Centralization means that they are controlled by law and regulated by agencies of government like the Central bank. Users of the conventional financial systems are just like 'onlookers'. They are at the mercy of the authorities in charge of the financial systems. Take for instance, my cousin was to buy a laptop from an online market. He had a failed transaction while trying to transfer money to the seller. His account was debited and on going to the bank, a cashier initially told him it would take a month to resolve the issue. It took shouting and calling higher authorities before his money was reversed about three days later. In a decentralized system, a middle man is not needed. Any transfer on the blockchain goes straight to the receiver's account.

In conventional financial systems, value for the currencies is by market and regulation. That is why government can order a devaluation of currencies. The currencies are also unlimited in supply as there is room for government to 'print or mint' currencies.

Ques 2. Why is a decentralized system needed?

The decentralized system is needed because
i. It incurs lower cost. This is unlike the traditional financial institutions that practically rip customers on charges. Worse still is when one wants to make international transfers. This is averted with the use of decentralized systems. Transferring funds using a system like Stellar lumens on the Stellar network is not only cheap but fast also.

ii. It is needed because it is not easily hacked. To hack a decentralized system, one would have to hack millions of nodes across millions of systems Worldwide which is impossible. One's account can only be manipulated if another gets hold of the private keys of the user. In a system like steem, it's not even easy since there are different keys to different operations which makes it even harder unlike the centralized system that is easily hacked.

III. The decentralized system is not susceptible to fraud. Since there is no Central pool for users funds neither is there any one in charge of managing funds on the blockchain, a case of fraud is near impossibility.

IV. In a decentralized system, transactions take place twenty-four hours, seven days a week. There is no case of holidays.

Ques 3. What affects the value of cryptocurrencies?

The Merriam Webster dictionary defines value as 'monetary worth'.
So factors that affects the monetary worth of a Crypto-currency say for instance Bitcoin are
a. The Utility of the coin. Bitcoin is now being used as a means of payment for goods and services by many large organisations. Early this year, Elon Musk announced that he had purchased bitcoins and later his Tesla vehicles could now be purchased with Bitcoin and consequently the price of Bitcoin rose astronomically.

_{Trading view of period between February and March from coinmarketcap.}

In the same vein, in this month of May, he retracted on his statement and said his company would no longer accept Bitcoin and the effect of the crash is still being felt as it not only affected the money worth of only Bitcoin but of other crypto-currencies.

b. Scarcity of the cryptocoin: Some cryptocurrencies like Bitcoin are actually 'burned' to keep the coins from over-circulating and thereby making demand to exceed supply. This therefore increases the value of the crypto-currency.

c. Positive media exposure of the coin can also increase or decrease the monetary worth of the crypto-currency. The example of Elon Musk above refers.

d. Popularity of a coin: The more popular a coin becomes, the more accepted it becomes and the higher the value becomes. Steem is a classic example. As it becomes more popular, the value is also increasing.

e. The market capitalization of a coin also increases it's monetary worth. Coins that have higher market capitalization like Bitcoin and ethereum have higher prices as opposed to those with lower market capitalization.

f. Cost of mining the crypto-currency also affects the value of a coin. The higher the cost, the lower the supply and all things being equal, the higher the demand and the higher the value.

Ques 4. Why can everyone not be a miner?

We know that mining crypto currency is the only way new ones can be created but not everyone can add new cryptocurrencies to the blockchain. Take for instance Bitcoin. To mine Bitcoin, a special computer like a Graphics Processing Unit (GPU) or an Application-Specific Integrated Circuit (ASIC) is used. This computer can run into tens of thousands of dollars to purchase which clearly, majority can not afford.

In addition, the computer consumes a lot of energy which Elon Musk even made a remark on recently. The energy consumption means an increased electricity rate which in many countries is not affordable. This is the reason why major miners go to countries where electricity rates are cheaper or set up near dams or even go to countries where personal solar panels can be used. All these are extremely costly.

Ques 5. Why can crypto-currency transactions be called more transparent?

The transactions can be said to be transparent since every transaction is between two people i.e the sender and the receiver. There are no third parties. Moreover, decentralized blockchains are made in such a way that each user has a public address that is accessible to anyone and so when sending a crypto-currency to someone, both the sender and the receiver's account balance can be seen. So there's no issue of denial from any party. That means I can check @levycore wallet balance and see the transactions made. This is impossible with the traditional financial system.

Secondly, they are transparent since all financial transactions made are immutable. This means that data entered into the blockchain can never be deleted. This makes fraud impossible.

Ques 6. Explain the development of crypto-currency in your country.

Even though Bitcoin was created since 2009, it was not until 2016 that it became popular in Nigeria. I remember the jingles then and the rush for the purchase of Bitcoin by forward thinking people then (I regret not buying) even though majority of the masses were skeptical about the authenticity of such currency.

In 2017, the Nigerian Central bank banned banks from engaging in crypto-currency related transactions. This however did not hold water as Nigerians continued in their crypto transactions.

By 2018/2019, Bitcoin and cryptocurrencies in general continued to slowly evolve in Nigeria with various Fin-tech agencies emerging that could exchange goods and services for cryptoassets.

By 2020 especially from the inception of the COVID-19 lockdown, the craze for cryptoassets plummeted. It received very positive media coverage. Crypto currency exchanges like Binance became very popular. Fintech agencies like Flutterwave made withdrawal of Fiat currency in exchange for cryptoassets very easy.
Steemit also gained traction in Nigeria within this period as a lot of people signed up.

However, by February 7th 2021, the Nigerian Government through the Central Bank began to enforce the ban on crypto-currency transactions by banks. This led to a lot of users having their bank accounts frozen.

This move has not stopped Nigerians from engaging in Crypto transactions as there is the option of Peer-2-Peer transactions. Infact, in a survey by Statista, Nigeria ranks third after United States of America and Russia in trading Bitcoin. Statista

This growth is forward moving as the Naira which is the native currency of Nigeria suffers devaluation almost every year coupled with the high rate of unemployment, trading cryptoassets has come to stay.

Conclusion

Decentralization has revolutionized the financial sector with crypto currency transactions making financial transactions faster, transparent and cheaper.

In Nigeria, trading cryptoassets have come to stay especially as it is helping to reduce poverty, joblessness and underemployment even though the government is anti-crypto.

Cryptoassets trading has enriched my finances especially with Steemit that I can make ends meet now unlike before where I was practically living from hand to mouth.

I am a member of steemalive and this is my introductory post

Subscribe:::Discord.
:::Whatsapp :::join trail