STEEMIT CRYPTOACADEMY [BEGINNERS' LEVEL]// SEASON 4 WEEK 5 : STABILITY IN DIGITAL CURRENCIES FOR PROF. @AWESONONSO BY @LADYOFPOLICY

INTRODUCTION

Greetings friends and everyone in cryptoacademy,it's indeed a great week with an amazing lectures from Prof @awesononso. I will like to answer the questions from this lecture based in the knowledge of what I grabbed.

QUESTION NO 1

EXPLAIN WHY STABILITY IS IMPORTANT IN DIGITAL CURRENCIES.

Truth be told,the importance of stability in digital currency cannot be overemphasized neither can it be underrated. First,I will like to explain what stability means.

In a simple term, stability simply means that something is in a state where it can not easily be changed. It doesn't really means fixed but rather anything in a stable state cannot easily be influenced to change.
Currency on its own is money and money is what we use for our day to day transactions. As we all know, normal currency of any country is controlled by the central body or goverment of that country but digital currency is internet money and it is totally decentralized and with this, nobody controls it.

Each time I open my Binance wallet, I often see warning which explains that cryptocurrency is very risky and I tend to wonder the risky part of it and it's clearly that because of its high level of volatility it's easy to gain and Loss money within a blink of an eye and this reason makes people to shy away from investing and trading digital currency.

It's is also very clear that the price of digital currencies in the crypto market is influenced by the level of demand and supply which is the more people that enters the market, the more the market grows so this is where I think stability enters in the market.

So many people gets their coin and lock it up in USDT because it's a stable coin and they want to be on a safer side, so this simply means that if digital currency can have a stable price in the market, the probability of people loosing their money will be very low and this will make more people to start getting involve with digital currency and this way the market will keep growing.

Also,if digital currency can be stable,it will tend to have more value as more people will tend to trust in the currency since it has the same value with the normal currency.
At the end,the importance of stability in digital currency still points at adding value and gaining peoples trust which will result to making more people to start using digital currencies and this way I think the vision of making digital currencies the future of finance will be actualized.
This answer is based on my little knowledge about cryptocurrency.

QUESTION NO 2

DO YOU THINK CBDCs WOULD BE GOOD IN THE FUTURE?? WEIGH THE PROS AND CONS IN YOUR OWN UNDERSTANDING.

Talking about central bank digital currency,it's a whole new thing to me. Making my research and courtesy of this lectures I understood that it's almost the same thing with the normal currency of a country just that this is digitally represented. To further explain,my country Nigeria uses a local currency called Naira,now the central bank digital currency of my country is eNaira and this currency will be online although it still have the same value with the local currency.

Pros and Cons of CBDCs

PROS OF CBDCs;

• Since it's a digital currency,the cost and of transaction will be very low when compared to the physical bank charges.

• There are too many rural areas where there is no bank, with the use of this central bank digital currency, it will be very easy for people in such rural areas to carry out their transactions.

• The CBDCs will ensure safety of lives because carrying physical cash can attract armed robbers but with this nobody will be carrying cash anymore and lives will be preserved.

• Everything is going digital and it's very good for each country to join because this central bank digital currency is very good for growth and development of any country.

• It will ensure privacy because there won't be any intermediate like the bankers who will be in charge of ones account,here it will just be you and the system.

THE CONS OF CBDCs;

• This system can cost many people their jobs as there wouldn't be any need for intermediate which are the bankers.

• Although it's a digital currency, it will still be under the control of the central body which means it's not giving any room for a decentralized system.

• For those people in rural areas where there is no physical bank and the general public at large to use this CBDCs, it requires a certain level of technical know-how because someone who is internet illiterate cannot use the system.

• The CBDCs can bring about competition amongst the commercial banks and they will be loosing customers.

Looking at the pros and cons of the CBDCs,you can easily point out that the merits are bigger than the demerits,so with this single fact I think and strongly believe that CBDCs will be very much good and important in the future.

QUESTION NO 3

EXPLAIN IN YOUR OWN WORDS HOW REBASE TOKENS WORKS, GIVE ILLUSTRATION.

A REBASE token can also be a stable coin because it has a particular price target. It can also be called price elastic token. This particular token doesn't work like other coins.

Unlike other coins like USDT for an instance,when there is an increase in the price of an asset ,the value of the coins in your holdings will increase likewise when there is a decrease in price of an asset,the value of tat asset will also go down but in REBASE token,reverse is the case.

In REBASE token,there is what is called REBASE mechanism which makes the REBASE token to be in a way that when there is an increase of price in the market,the thing that will increase will be the amount of coin in a users wallet but the price will still be the same likewise when there is a fall in the market what will reduce will be the coin in a users wallet not the value.

For instance,let's say I have 50 pieces of a particular REBASE token and it's worth is $20, when there is an increase in the market the quantity of tokens in my wallet might increase to let's say double of my initial token which will be 100 pieces of that token but with the increase in the quantity of tokens I have the value of my coin will still remain $20 likewise when there is a fall in the market, what will fall will be my coin let's say it fall down and my coin remains 25 pieces which is half of my coins, although what I have left is 25pieces of coins but the value will still be $20.

Therefore REBASE token is a type of token in which the increase and decrease in price affects only the quantity of tokens in a users wallet while the value of the token remains the same.

QUESTION NO 4

GO TO THE HTTPS://WWW.AMPLEFORTH.ORG/DASHBOARD/. CHECK THE NECESSARY PARAMETERS AND CALCULATE THE REBASE %. WHAT ELSE CAN YOU FIND ON THE PAGE?

After exploring the Ampleforth website,I got the following parameters and I will use them to calculate the rebase%.

The Oracle rate is 1.009

The price target is 1.061

To calculation the rebase %;
Rebase % = {[(Oracle Rate - Price Target) / Price Target] x 100} / 10
= {[( 1.009 - 1.061) / 1.061 ] ×100} / 10
={[(-0.052) / 1.061 ] × 100} / 10
= {[(- 0.094)] × 100} /10
= (-4.9) / 10
= -0.49
:. REBASE % = -0.49%

Furthermore,I was able to see few more things in the page which includes the following:

QUESTION NO 5

TRADE SOME TOKENS FOR AT LEAST $15 WORTH OF USDT ON BINANCE AND EXPLAIN YOUR STEPS. (GIVE NECESSARY SCREENSHOTS OF THE TRANSACTION).

For this particular transaction,I will be using 0.00047BTC which worth 24.58 USDT.

First thing I did was to login to my Binance wallet,I opened my spot wallet. I selected BTC because that's what I choose to use for the trade, when I clicked on BTC it took me to trade and I selected the pair of BTC/USDT
,When the trade opens I filled the quantity of BTC I wish to sell and clicked on sell BTC and I got my USDT instantly on my portfolio.

The screenshot below shows the steps I took in the transaction.

CENTER> QUESTION NO 6.

TRANSFER THE USDT TO ANOTHER WALLET WITH THE TRON NETWORK. FROM THE TRANSACTION, WHAT'S ARE THE PROS OF THE STABLE COIN OVER FIAT MONEY TRANSACTIONS? (GIVE SCREENSHOT OF THE TRANSACTION

For the sake of this homework,I will transfer the USDT using the (TRC20) which is the Tron network from my BINANCE wallet to my trust wallet.

First thing I did was to go to my trust wallet and copied my USDT address, then I went to my Binance and opened my spot wallet, clicked on USDT and when it opened I clicked on withdrawal. The slide that opened requires me filling out the form which include the address am transferring to and the quantity of USDT am transferring. After filling the details I clicked on confirm and to confirm the transaction a code has to be sent to both my phone number and my Gmail which I input before the transaction could be completed.

The screenshot below shows the process of the transaction;

After carrying out this transaction,I observed carefully that stable coins has some advantages over Fiat money.

I observed that the charges was very low,for the transfer of 21usdt I was charged 1usdt but if it's transaction of Fiat money transaction the charges are always higher.

I also observed that the speed at which I got the USDT in my trust wallet was just within one minute but in Fiat money transaction,network is always delaying most times it takes hours to days before a transaction can be confirmed by the recipient.

I also observed that the security level was high. Before the transaction was completed,a confirmation code was sent to both my Gmail and my phone number which ascertained that I was actually the one carrying out the transaction,but in Fiat money transaction it's not always like this just a password or finger print is enough to carry out transaction.

CONCLUSION

This is really one of the best topics I've learnt in this season so far. There is no doubt about the fact that cryptocurrencies fluctuates easily because of their volatile nature hence scares some people from investing and trading it but if it can attain a certain stable state I strongly believe that more people will venture into it.

This lesson really taught me a lot especially about REBASE token,it's my first time of heading about it and courtesy of this homework I was able to study,research and learn more about the REBASE token. Thank you so much Prof. @awesononso for such a warming lectures.

CC;
@awesononso
@steemblog
@reminiscence