Crypto Academy Week 14 - Homework Post for professor @levycore (Learn About Cryptocurrency)

I am happy to be here a gain this week, to be a partaker of one of the crypto lesson and to be able to do the homework for the lesson of professor @levycore

Source

QUESTION 1. What is the fundamental difference between Cryptocurrency and the conventional financial system?

There are many differences between the two, but I will mention just two or three in this homework post

1. The most important distinction between the two being that, while conventional financial structures are centralized, cryptocurrencies such as Bitcoin utilize a decentralized network that is not controlled by banks or governments.
   When performing transactions, cryptocurrency does not include the use of intermediaries and is not required to be sponsored by any government in order to be considered valuable. This digital currency is based on a distributed ledger that is shared through multiple networks.

2. Unlike conventional financial systems, where central banks are responsible for ensuring that the same money is not spent twice, cryptocurrency systems entrust transaction verification and validation to each network participant.

3. Banks and other financial institutions charge exorbitant fees for transactions, and confirmation can take days.
   Cryptocurrency transactions are carried out over the internet and have little or no transaction fees and it doesn't takes longer time for transaction to take place.

QUESTION 2 Why is a decentralized system needed?

Decentralized financial system has and will continue to bring improvement to the world. There are lot of flaws that happens with the traditional centralized financial system.
The first reason why decentralized system is needed is that:

• Anyone with an internet connection and a smartphone may use decentralized finance to access financial services. In the current structure, there are several obstacles to entry, including: status, citizenship, geographic barriers, and so on.
  A top trader at a financial firm will have the same degree of access as a farmer in a remote area in a decentralized financial system.
  The decentralized fianancial system reduces the risk of cyber theft that is very common in the current financial system.
  

QUESTION 3: What affects the value of cryptocurrencies?
The value of any crypto depends on things that happen around the cryptocurrency such as:

• High demand

The value of everything that can be exchanged, including all digital currencies on the market, is determined by supply and demand. For example, if more people want to buy bitcoins and less people wants to sell them, the price would rise, and vice versa. And, since many cryptocurrencies' supply is small, their rising popularity has pushed up prices.

• Secondly, if a currency gains widespread acceptance, its value will skyrocket. This is due to the fact that the total number of cryptocurrencies is small, and as demand rises, so does the price.
• And finally, Theproduction costs of making a coin are also factors that influence the cryptocurrency's value. Bitcoin, for example, has a high manufacturing cost. The cost and energy invested needed bitcoin mining can be seen as one of the reasons for the currency's value.
  

QUESTION 4: Why can't everyone be a miner?

Although it is understandable that everyone would like to benefit from crypto mining, it is not for everyone. Why is this so?

Cryptocurrency mining nowadays necessitates a large amount of computing power as well as energy. What is the reason for this? Since crypto mining necessitates a significant amount of computational power to produce new guesses on a continuous basis. You must consider not only whether you have enough computing capacity and electricity to power your service, but also the costs associated with such a large undertaking. Crypto mining with only your personal computer was once possible, but those days are long gone.
Moreover, In terms of crypto mining, governments around the world have differing perspectives on cryptocurrencies. Investing in or utilizing cryptocurrencies as a payment mechanism is likely to be prohibited by certain governments in various geographic locations.

Question 5: Why can cryptocurrency transactions be called more transparent?

Cryptocurrency/Blockchain should be seen as the new standard for transparency because it makes data open/transparent in a way that has never been seen before in financial systems. On the blockchain, how is data rendered transparent? A block explorer, which is used to scan the blocks of a blockchain, their contents, and their related data, gives network participants access to the holdings and transactions of public addresses.
This ensures that decentralized threat data can be made available in the case of cybersecurity. Although some may argue that in-depth reviews and reports offer ample assurance that security solutions are working as anticipated, prejudice may be at play because these businesses are paying for the review reports, certifications, and other acknowledgements in the first place. Due to the transparency offered by blockchain, any prejudice can be removed.

QUESTION 6: Explain how the development of cryptocurrency in your country?

I am from Nigeria. I would tell you that it is not really a good news here in Nigeria because dealing in cryptocurrencies and facilitating payment for cryptocurrency exchanges are forbidden, according to the Central Bank of Nigeria (CBN). The CBN also ordered all banks and other financial institutions to locate and close the accounts of anybody who transacts in cryptocurrency or runs cryptocurrency exchanges.

The CBN's directive on cryptocurrency transactions would surely have an impact on the Nigerian cryptocurrency trading because it effectively prohibits traders from purchasing cryptocurrencies with credit/debit cards issued by Nigerian banks or collecting proceeds from cryptocurrency purchases from exchanges that allow cryptocurrency buying and selling.

Although some exchanges seem to have found a way around the ban through the peer-to-peer trading, which allows individuals to buy or sell cryptocurrency directly from individual traders rather than from exchanges.

CONCLUSION

In my own opinion together with what I have learn in this lecture of professor @levycore, I have come to realize that the only solution as at present to the barriers and flaws associated with the current centralized financial and banking system is for every nation to adopt the new decentralised financial system. It has come to solve the proble of geographical barriers in moving money, it has also come to solve the problem of intermediaries, For instance in Nigeria where only one commercial bank is present in a town of over 2 million people, decentralized financial system has come to solve all this problems and it is good to embrace the system.

Thank you all. I am @feliicia

Cc.
@steemcurator01
@steemcurator02
@levycore
@steemitblog