Steemit Crypto Academy Season 4 Beginners' course - Task 5: Bitcoin, Cryptocurrencies, Public chains.
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What Is Cryptocurrency and How You Would Like To See Cryptocurrency In The Future?
What is Cryptocurrency?
Before we dive into the world of cryptocurrencies it is pertinent that we understand what is meant by the term.
Cryptocurrency is actually a term which came about by merging the worlds crypto and currency.
Cryptos meaning something which is hidden, it has its origin from the Greek word kryptos meaning hidden.
whilst a currency is something which is accepted as a means to facilitate exchange or to pay for a good or service rendered.
Currencies are usually government issued and unique to a country as it is accepted by the populace as means of making payments.
Cryptocurrency
A cryptocurrency is what can be referred to as a digital money that is produced by the use of Blockchain technology and Cryptography, this makes it unique, secure and it cannot be tampered with.
As stated earlier a cryptocurrency is digital cash and as such they cannot be handled physically like you have with fiat currency, but stored in wallets. This easy storage has made it's use increase among users.
Cryptocurrencies employs the use of a decentralized system. The authority is a peer to peer system containing networks of computers and users.
Unlike centralized system where authority is a single authority or a single network of authority. Cryptocurrencies are decentralized and are not bound to a single authority.
One thing to note about cryptocurrencies is that they have no barriers, unlike the liquid cash which is government issued they are not bound to any authority making them acceptable over many countries.
HISTORY
Although the idea of cryptocurrency has been in existence as can be seen in the use of cryptography in history. The revolutionary change in the popularity started with the birth of the Bitcoin.
The Bitcoin is the first cryptocurrency and was created by a person or a group called Satoshi Nakamoto. Nakamoto wanted to produce a system of payment that didn't conform with the already existing system of making finances.
Even though the first Bitcoin was mined as far back as 2009, the recent cryptocurrency revolution and popularity can be attributed to the acceptance of the Bitcoin.
This is evident in that fact that currently there are thousands of other cryptocurrencies in existence.
Being decentralized they have become a currency for the future.
OTHER COINS
Being what i term the founding father of cryptocurrency, the Bitcoin is usually categorized separately in realtion to other cryptocurrencies. The others are categorized as alternatives usually shortened to alt coins.
Currently alt coins have grown in size accounting for up to 60% of market in cryptocurrencies. Alt coins although categorized together in relation to the Bitcoin are of different types which is dependent on the function which they perform.
Some types of alt coins
• Mining Based
• Meme coins
• Utility coins
• Stable coins
• Security tokens
It is also pertinent to note that some alternative coins can fall into more than one category in the above information.
Cryptocurrency Prices
Like almost every market in existence, the price or value is dependent majorly on two factors which are
•SUPPLY
•DEMAND
The higher the demand for a good or service compared to it's supply will determine the value attributed to it.
When there is a large amount of demand but the supply is smaller there will be a rise in price. And when we have a large supply but demand is reduced then drop in price will be noted.
This is the same when we look at the cryptocurrency market, the value placed on a cryptocurrency will be dependent on whether it is in demand and the corresponding supply available.
The above image is gotten from the site https://coinmarketcap.com/ , which gives real time Information about prices and trades regarding cryptocurrencies. This can be quite beneficial for new traders as well as older ones.
FEATURES UNIQUE TO CRYPTOCURRENCY
| FEATURE | DETAIL |
|---|---|
| (i) | |
| Storage | Cryptocurrencies are stored using wallets |
| (ii) | |
| Price | The prices are dependent on how much is supplied and the demand for them |
| (iii) | |
| Decentralized | No single authority controls them |
| (iv) | |
| Cryptography | Use of cryptography makes them secure and cannot be tampered with |
ADVANTAGES OF CRYPTOCURRENCY
• Cryptocurrencies are portable and easy to carry since everything is on the internet.
• Cryptocurrencies offer faster transactions as their is no third party involved to facilitate transactions.
• It can be accessed by anyone regardless of where they are.
• There is no need for real life Information, this has also led to the increase in it's usage.
• Being decentralized, there is security of data and your data cannot be used for any malicious purposes.
DISADVANTAGES OF CRYPTOCURRENCY
• Although freedom is a good thing, this has also been employed by criminal organization to move funds without raising any alarms.
• The volatility of the market makes it unstable and unwary traders who do not make proper research can make a lot of losses.
• Being decentralized, when there is transaction mistakes there is usually no way to make reversals.
How You Would Like To See Cryptocurrency In The Future?
Personally i already see cryptocurrency as a revolutionary change which has come to stay in regards to our finances.
In my country Nigeria , there is a current ban on trades of cryptocurrencies using our bank accounts, but recently the government launched their digital currency know as e-naira , although it is regularized by government.
I believe this is a gradual change in their stance without being very obvious to the populace. As so many transactions are facilitated using cryptocurrencies as the form of payment, I see a future where i can buy a plane ticket here using cryptocurrencies.
The continual adoption of cryptocurrencies by many users across the world has increased it's user reach as people who didn't understand how they work can now easily relate them to their everyday life.
Many times people have had their atm cards declined because the bank network was poor. Being decentralized cryptocurrencies will make such transactions faster and easier.
This system makes the need to depend on printing of currency reduce, paper money is subject to wear and tear. Already some countries with an eye have started installations of ATMs which are cryptocurrency based.
I see a future already where they displace the percentage of dependability on liquid cash as long as there is a continued relationship to it's usage in every day life.
I would also love to see a future where a skeptical country such as nigeria plays a leading role in the advancement of it's usage.
CONCLUSION
It would not be foolish to say that there will come a time when cryptocurrencies will displace paper money usage.
Already there is a cryptocraze since most people are just hearing of them. With time they will names such as dogecoin will become household words.
I look forward to your review of my post, this topic by professor @steam4u was a much enjoyed one.
#club5050 😀