Crypto Academy Contest/ S2W2 - Cryptocurrency Adoption by @jueco

Hello Crypto minds,
I am very glad to be among the participants of the season 2 week2 of the steemit crypto academy contest.
This week's contest promises to be very educative and interesting, it also promises to be an engaging contest.

In this contest, we shall be examining how adopting to cryptocurrency is beneficial to various institution, little wonder why it is titled "cryptocurrency adoption".

Please follow along as we begin our adventure.

Cryptocurrency as we all know was brought into existence through the creation of bitcoin in the year 2008.
And it was created to be a solution to the terrible financial crisis that occurred in 2008 due to the fact that the world solely depended on banks for financial transactions.

The first cryptocurrency (Bitcoin) was created by an anonymous individual with the name Satoshi Nakamoto and was officially launched in the year 2009.

Cryptocurrency as we all know can be explained to be a digital currency that is built using a blockchain technology, which implies that it is decentralized, well secured, transparent, immutable, has a low transaction fee and protect the identity of it's users.

Cryptocurrency is also very useful in carrying out financial transactions, as it is , in it self a store of value.
And as such, many businesses have began adopting to the use of cryptocurrency for financial transactions.

Some might wonder what adoption is, well adoption can be explained to be a process of getting familiar to the operation of something.

So when we discuss about the adoption of cryptocurrency in the financial market, we are in a sense discussing on how the financial market has implemented the use of cryptocurrency in their transaction and how it has benefitted it, alongside it's challenges.

The fact that there have been an increased rate in the adoption of cryptocurrency by the financial market cannot be denied, but for the sake of newbies, permit me to quickly scale through what a financial market is.

A financial market can be explained to be any place that provided the means for buyers and sellers to trade financial instrument, equities, international currencies, etc.

It also plays a major role in facilitating the interaction between those who have capital to invest and those who are in need of investment capital.

The financial market just like every other market consist of buyers and sellers struggling to buy and sell at the most convenient prices, and this war between the buyers and sellers is what determine the nature of the cryptomarket.

Cryptocurrency has been adopted in various financial institution,
For example socios platform is a platform used by the football world to adopt to the use of cryptocurrency, and the audius platform is being used by the music industry to adopt the use of cryptocurrency.

In some countries, bitcoin has been legalized as a means of payment, even Elon musk, world richest man recently made an announcement that Tesla merch can now be purchased with the use of doge coin.

There are several ways that businesses have been boosted through cryptocurrency transactions and some of them are :

• TRANSACTION SPEED:

Due to its decentralized nature, cryptocurrency transactions happens to be the fastest conventional currency transaction, and this is possible because of the absence of a third party.

Different blockchain are able to perform over 10 transactions per second.

• TASK AVIATION:

During cryptocurrency transactions, businesses need not pay extra money for tax, since there is a lack of regulation on cryptocurrency by the governmental authorities.
And as such, this will help increase the profit made by business owners.

• BUYER AND SELLER RELATIONSHIP:

The use of cryptocurrency during transaction also helps to bring together the buyer and the seller.
Since there's no other party involved in their business transaction.

• WIDE COVERAGE:

The adoption of cryptocurrency in financial transactions helps to send and receive funds from far distances, with ease.

For example, if I am to send NGN(Naira) from Nigeria to USD in USA, through the use of conventional currencies, it will have to pass through many stressful processes of which it might later be denied, but with the use of cryptocurrency, transaction can be made to anyone with a wallet address, irrespective of his location.

• ATTRACT INVESTORS:

Many investors love business transaction that are done without the knowledge of a third party, they love their privacy and also want to avoid unnecessary questioning from the authorities on the source of their wealth.

And since the use of cryptocurrency in financial transactions can keep their transactions private, they will be happy to join the cryptoworld.

The acceptance of cryptocurrency globally as a legal means of transaction will no doubt be a very wise decision.

It will help bring about lots of innovation and improvement to the world's financial sector as it will help to eliminate the involvements of third parties in the financial transactions, thus reducing transaction cost and increasing transaction speed.

The acceptance of cryptocurrency will also help to decrease the inflation rate of some countries with devalued currencies, as cryptocurrency has a fixed supply.

Also when a particular amount of money is sent, the receiver will receive the exact amount of money sent with no deduction, unlike with the conventional currencies where there's will be a reduction used as transaction fees.

One of the major challenges of cryptocurrency is it's high volatility nature, and of course, since business owners want to implement it as a means of payment, it ought to be of great concern to them.

The high volatility rate of cryptocurrency is usually as a result of the continuous struggle between buyers and sellers, which often leads to the instability of the cryptomarket.

When there are more buyers than sellers in the market, it leads to an increase in the price of tokens and this is what technical analyst know as a bullish trend.
It is illustrated below.

^{SCREENSHOT FROM MT4}

And when the sellers are more than the buyers, it leads to a reduction in the price of commodity, which technical analyst know as bearish trend.

^{SCREENSHOT FROM MT4}

The volatility of nature of cryptocurrency is of great concern to business owners because, if not analyzed well might lead to a great loss in a business.

For example, imagine a car is worth $30k and as at when it was to be sold, BTC also worth $30k, which is equivalent to the price of the car.
Then the business man sold out the car for one btc, but as at after he sold the car for 1btc, the value of btc dropped to $20k.

We can see clearly than the man is in a loss of $10k and such sales will be detrimental to the growth of the business.

In a nutshell, the volatility nature of cryptocurrency is of concern to business owners, as it has a great impact on the profit/loss made by the organization.

And inorder not to feel the effect of high volatility, they might decide to transact using stable coin

There are some other factors that limits the adoption of cryptocurrency asides it's volatile nature and some of them are

• NEWS:

As a crypto lover, I have come to know that there are three ways to analyze the condition of the market and predict it's next move, they are (sentimental, technical and fundamental analysis) with fundamental being the most effective.

Fundamental analysis usually consist of news about cryptocurrency and an announcement from a prominent individual in the cryptoworld can leave the cryptomarket in harvoc.

Something like this happened when Elon musk twitted that Tesla would no longer accept Bitcoin as a means of payment.
This news distabilzed the cryptomarket and this is one factor limiting the adoption of cryptocurrency.

The governmental authorities do not want to give that power to any individual nor group of individuals.

• ENVIRONMENTAL HAZARDS:

Another issue limiting the adoption of cryptocurrency is the environmental hazard involved in the mining of some cryptocurrency.

The mining of bitcoin requires complex machines which is needed to solve puzzles that will be used in the validation of bitcoin block, and this machines cannot be powered by electricity, which thus leaves the miners with no other option but to search for an alternative power supply, which is toxic to the health of individuals.

The current mining of btc leads to the emission of over 30million carbons

• FEAR OF UNCERTAINTY:

The uncertain nature of cryptocurrency is one factor limiting it's adoption.
Many investors are not willing to embrace the use of cryptocurrency because of its uncertain nature.

Some had doubts about cryptocurrency which was further strengthened with the crash of Terra Luna.
And with this, they're determine not to come close to cryptocurrency.

There are some advantages and disadvantages of cryptocurrency to business and they shall be discussed below.

• TRANSACTION SPEED:

The speed of cryptocurrency is one of it's benefit that crypto users enjoy a lot.
The transaction carried out using cryptocurrency is usually validated within few seconds and this will give the room for numerous transactions to be performed per day.

• TRANSACTION FEE:

There is usually very little or zero transaction fee attached to the transfer of cryptocurrency.
Unlike the conventional banks where we are always charge per transaction made.

• SECURITY:

The security of business funds is another Important factor being considered by business owners.

No individual will love to perform businesses that is not well secured, and the use of cryptocurrency in financial transactions, the security of your funds is assured.

• PRIVACY:
  The use of cryptocurrency in financial transactions helps to protect the identity of the business partners.

As they will never be investigated irrespective the amount of funds they transact, and such privacy is what is missing in our commercial banks.

• The use of cryptocurrency in financial transactions helps to expand the scope of a business as funds can be transferred and received from a client irrespective of their location.

• IRREVERSIBILITY OF TRANSACTIONS:

One disadvantage of cryptocurrency transaction is that once it has been validated, it cannot be reversed. It's transactions are always permanent.

For example, if a buyer sends money to a wrong wallet address, the money is forever lost in the crypto space, irrespective of how huge it's amount is.

• HIGH VOLATILITY:

The high volatility rate of cryptocurrency is another Challenge that business men tend to face when cryptocurrency is accepted as a medium of payment.

They might decide to save lots of money today and then by tomorrow the money has reduced drastically.
This challenge of price volatility can be solved only if funds are saved in stable coins.

The adoption of cryptocurrency to business is something I personally anticipate.
I believe it will solve majority of the financial issues facing some businesses today.

For example, it will be difficult for employees to steal from employers since all transactions will be openly seen.