Crypto Academy Week14 Homework Post For Crypto Professor @levycore // Learn About Cryptocurrency.

INTRODUCTION: hello friends, I am so glad to be here today to discuss with you about my homework task, Week14 given by professor @levycore Learning About Cryptocurrency. In the homework task i elaborated and simplified all the questions.

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(1) WHAT IS THE FUNDAMENTAL DIFFERENCE BETWEEN CRYPTOCURRENCY AND THE CONVENTIONAL FINANCIAL SYSTEM

(i.) LEGALITY
• Cryptocurrency are digital assets which act as a medium of exchange, government of a country have no control over it, cryptocurrency is Decentralized in nature no central body can influence or Control their value.
• While in conventional system, the government are in charge of conventional system also known as (fiat money) which are been regulated by the central bank of a country also conventional system is much recognize as a legal tender which is the official means of financial transaction. government Control the supply and issue policies from time to time that can affect their value.

(ii•) TANGIBILITY
• Cryptocurrency it is not possible to hold touch or have a physical feel of cryptocurrency, there operate online as virtual coins.
• while conventional system have physical aspect which exist as notes or coin that is possible to have a physical feel or hold on to someone can touch or hold it.

(iii•) SUPPLY
most cryptocurrencies have a cap when it comes to supply. it is possible to tell the number of cryptocurrency in circulation.
• While in the Conventional system, that is (fiat money) have unlimited Supply. which means the central authorities have no cap to the extent in which they can produce money.

(iv•) Exchange Aspect
• Cryptocurrency means of exchange is digital no third parties involved they are created by Computers and operate as private pieces of code.
• while the conventional system can exist in both physical and digital form Physical form as in the bank and Electronic payment service allow people to transfer fiat money digitally also no third parties involved people can make transaction with one another physically.

(v•) Storage
• Cryptocurrencies are virtual digital currencies which exist online and can be stored in digital wallet called cryptocurrency wallet. the wallet can also be use to check account balance.
• While the conventional system fiat money, can be stored in various forms such as bank also PayPal allow users to store fiat money in digital form.

(2) WHY IS DECENTRALIZED SYSTEM NEEDED

(i•) Low transaction fee
It is the cheapest form of transferring money across borders one can transfer money to friends, family members etc living oversea through Decentralized system at a very low rate and it is very fast.

(ii•) Privacy
Decentralized system allow users to make Transaction without sharing their identity to be able to complete the transactions. there are Altcoins which function are to maintain the privacy of people behind Transactions.

(iii•) Fast means of transaction
Cryptocurrency enable instant payment or transaction to be made, unlike other centralized banking system that take days to process transactions.

(3) WHAT AFFECTS THE VALUE OF CRYPTOCURRENCIES

(i•) Government Regulations Government regulations on cryptocurrency is very high it tend to affect the price of cryptocurrency I could remember in my country last three months the government intend to banned cryptocurrency.

(ii•) Cost of production
Another factor contributing to the value of cryptocurrency is the direct cost and the opportunity cost of producing them, the mining of Bitcoin for instance is very high, you need specialized hardware systems that eat up vast amount of energy to mine Bitcoins.

(iii•) Adoption my masses
There is limited number of cryptocurrencies unit available. also not all investors or trader that do accept cryptocurrency but if the general public should accept cryptocurrency as a medium of exchange in transaction the demand will rise and its price will also increase.

(iv•) Scarcity of cryptocurrencies
Bitcoins are finite in number that is 21 million coins, as more and more Bitcoin are mined and brought into the block chain circulation the demand for thesame increases pushing their value very high, some cryptocurrencies develop a burning mechanism that destroy a part of the coin Supply, this causes the coins to become more scarcer and rises their value as a consequence.

(v•) The utility of the coins
To make a cryptocurrency valuable one needs to enhance it's utility. For instance you can't start using Ethereum platforms without Ether. Ether is a coin that is specifically designed and tailored to run the transaction within the Ethereum blockchain platform so the value Ethereum is dependent on the demand for the Ethereum platform services.

(4•) WHY CAN'T EVERYONE BE A MINER?

(i•) Equipment and power
The equipment and power needed to mine cryptocurrency such as Bitcoin is very expensive:

• Digital wallet

Digital wallet, is a software that permit you to exchange cryptocurrency with other people It is also used to check cryptocurrency account balance with it digital wallet can be installed on computer, cloud and even on phone so one need to set up a digital wallet first before mining.

• Dedicated mining computer
To successfully mine cryptocurrency you will need a dedicated computer and a specialized hardware, and they are expensive in which not everybody can afford it.

(ii•) Value are volatile
Cryptocurrency price is volatile that is it can fluctuate at any given time, so it price do changes at any given time. Some one can easily lost his money when the price fall.

(iii•)Too much risk
Because of the expense of cryptocurrency mining there is risk , one could invest money and time into mining and still end up with nothing

(iv) Mining pools don't help
Mining pools consist of several people sharing in the equipment and cost to do the mining. The problem with this idea is that it also spread out any profit so that each person get less.

(5 ) WHY CAN CRYPTOCURRENCY TRANSACTIONS BE CALLED MORE TRANSPARENT?

(i•) Distributed Network
Blockchain operate as a public ledger of transaction, that don't need centralized authority to regulate it. Beside cryptocurrency is Decentralized no third parties involved, creating more trust, not like the traditional banking system that involves third parties.

ii•) Encrypted
Blockchain uses heavy encryption involving public and private keys to access a safety deposit box to maintain virtual security. the security system is very strong they be creating more confident and trust.

(iii•)No Duplication
Non duplicable protocol is encouraging investors, economies, traders to trust in using digital currencies, it has the potential for unleashing countless application.

(6). EXPLAIN HOW THE DEVELOPMENT OF CRYPTOCURRENCY IN YOUR COUNTRY?

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Cryptocurrency is growing very rapidly in my country Nigeria Paxful is the largest peer-peer (P2P) platform in African reported that Nigeria is the second largest Bitcoin market on Paxful. Nigeria has traded about 60,215 bitcoin, beside USA it is the second largest world wide also Paxful reported that 137% increased in new registration. So cryptocurrency is growing fast especially Bitcoin, which are mostly traded by young Nigerians because Bitcoin Transactions, are more cheaper and faster than the traditional banking system, which has more restrictions. Other cryptocurrencies that is been trade in my country beside Bitcoin are Binance, Paxful, Luno etc But cryptocurrency is not yet adopted as an official, form of transaction, it is not generally accepted by all traders or investors, and government regulations on cryptocurrency is very strict in the country, as of last three months the federal government intend to banned cryptocurrency, the official currency in the country is the naira note. The naira is generally accepted by the masses in the country.

CONCLUSION: thank you so much professor @levycore for the wonderful lecture, about cryptocurrency, i learnt a lot from it, also thank you all steemians, for reading my post I appreciate.