Crypto Academy Week 14 - Homework Post for @levycore-

INTRODUCTION

Hello steemians. It is an awesome and wonderful thing so far in this great community in Steemit @Cryptoacademy. I also want appreciate Professor @levycore for thoroughly explaining crypto currencies, how they work, and their advantages and disadvantages in this week's lecture. I will delve into the matter of this week's homework, Without wasting any time. Stay through and read my entry.

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ANSWER TO QUESTION ONE

Firstly, I will explain what cryptocurrency is all about. Cryptocurrency is a decentralized network which is built on blockchain technology. In its simple meaning, cryptocurrency is a digital currency, securing by cryptography which makes it impossible to produce counterfeit of it. One of the most important feature of cryptocurrency is that, they are not issued by any central authority for example,banks and government agencies. It is free from interference and manipulation from third party. This is why it is called a decentralized network. Cryptocurrency is determined to make transactions and transfer of funds easier between two persons like banks and credit card company. These transfers are usually secured by the use of public keys and private keys. The first cryptocurrency and the most popular and most Valuable cryptocurrency is Bitcoin. Bitcoin was launched in 2009 by an individual known by Satoshi Nakamoto. Cryptocurrency is usually used for virtual transactions. Also, transactions which are concerned with cryptocurrency and do not require intermediaries. In other words, the transaction is solely between the sender and the receiver. There are other examples of cryptocurrency are Ethereum, ripple, Tron,steem etc. WHEREAS, Conventional financing is the traditional use to physical currency to acquire products and services. Conventional financing is a scheme offered by financial institutions or banks which are not guaranteed by the government agencies. The features of conventional financing are as follows:

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1. Conventional financing is physical.
2. It is located in a specific country for example Naira is concerned with Nigeria.
3. Central Banks and financial institutions control the finances.
4. Conventional financing is used by government and it is not guaranteed.
5. There is a payment of commission and control the decision making while in cryptocurrency, users make decisions for themselves. There is no intermediaries between parties.
6. In cryptocurrency,it is decentralized while in Conventional financing,it is centralized.

ANSWER TO QUESTION TWO

Firstly, decentralization allows direct peer-to-peer transactions between parties without intermediaries. With a decentralized decentralized system, investors deal directly with each other rather than operating from centralized system. In this system,funds remain or stored on the blockchain.

Why decentralized system is needed is tied to this reasons. They are;

1. In decentralized system,the user has the most control platform.
2. There is no manipulation or hacking from internet fraudstars.
3. There is minimal commission during transactions.
4. It cannot be regulated by any government or any financial institutions.
5. It is a secured platform or system for trading.
6. Decentralized platforms do not have much liquidity
7. Decentralized platform or system is faster when executing orders.

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ANSWER TO QUESTION THREE

Generally speaking, what affects the value of cryptocurrency is the Change in prices. Now, there is a dip in the cryptocurrency market which is causing a price reduction as against what was obtainable before now where there was high price in the crypto space. Below are some of things that affect the value of cryptocurrency.

1. REGULATORY CHANGES: The value of cryptocurrency is affected in a location or jurisdiction where it is illegal. But this does not in totality make cryptocurrency illegal. However,it has to be accepted and approved by the government.

2. NEW CURRENCIES: There are many cryptocurrencies which are emerging day-by-day and thereby having a devalued effect on all the cryptocurrency.

ANSWER TO QUESTION FOUR

Mining refers to the process of accumulating cryptocurrency as a reward for work that has been completed. It is also the process of gaining cryptocurrencies after cryptography equations have been solved through the use of computers. The reason why everyone can not be a miner are as follows;

1. The equipment and power is expensive
2. The values are volatile. The values of cryptocurrencies are not stable. It increases and decreases.
3. There is too much risk involved in mining cryptocurrency. Most times,even after successfully mining cryptocurrency, the price May drop.
4. Mining pools do not. The issue associated with this is that, it spreads out any profits which in the end, persons can get less.

ANSWER TO QUESTION FIVE

The reason why cryptocurrency transactions are transparent simply because it has a decentralized nature. All transactions are seen either by having a personal node or by using blockchain explorers which allows anybody to have access to or see transactions occuring live. It is transparent because, investors need to know the risk with respect to financial institutions who are in possession of funds.

ANSWER TO QUESTION SIX

The development of cryptocurrency in Nigeria has grown to a bigger and larger industry until the government of Nigeria intervened and placed ban on cryptocurrency. Some of the cryptocurrencies well traded in Nigeria are Bitcoin, Ethereum, ripple, Tron, steem etc. In Nigeria, the only recognized means of payment is Nigeria. This means that, cryptocurrency cannot be used for transacting in the country. But,it is correct to assert that, the existence of cryptocurrency is not illegal. It is only illegal based on the location and jurisdiction. For instance,in Nigeria cryptocurrency is illegal but this does not make cryptocurrency illegal. What is applicable now is peer-to-peer transactions but there no known cryptocurrency that publicly trade or Carry out business in the crypto space. However, early this year,the Central Bank of Nigeria placed a ban on any transaction that is painted with cryptocurrency and they also threatened to shut down accounts that are traced with any transaction with cryptocurrency. This was against the intention of the Securities and Exchange Commission to normalize digital currency.

CONCLUSION

Cryptocurrency has come to stay in the world to make life easier for people. With cryptocurrency, poverty is set to be eradicated and guaranteed safety in financial transactions. The government around the world should eradicate conventional financing system and reckoned with cryptocurrency because of the benefits found in cryptocurrency in the above researched homework.