Season 2: Learn About Cryptocurrency | By @maazmoid123
Hello Everyone, so today I invite you all to read my today homework which I am going to make on the Learn About Cryptocurrency subject which is given by Professor @levycore.
So let us continue with our homework.
1. What is the fundamental difference between Cryptocurrency and the conventional financial system?
So firstly the fundamental difference between Cryptocurrency and the conventional financial system is that Cryptocurrency is a decentralized system which means no one has the power to authorize it while the financial system is a centralized system which means it is been controlled by some authority.
Cryptocurrency is an independent system and it does not require any intermediaries to work for them as a third party but in the conventional financial system, there are always the third party is required such as the Banks and the Government who controls the money input and output and other main things.
Another main fundamental difference or Cryptocurrency and the conventional financial system, that the currency of Crypto only works virtually, while in the conventional financial system the currency is in the form of Physical.
Regarding hacking for cryptos and theft for the financial system, is as if you share your Id with any third party then there can be chances of your wallet being stolen or being hack in cryptocurrency otherwise they are saved. But in the financial system you can be robbed at any place or also the currency can be theft from the banks and also from the Government.
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2. Why is a decentralized system needed?
So it is an important question that why we need a decentralized system when we already have a centralized system. But if we see and according to the more researches it is shown that people don't like being authorized by others, people want freedom and want transparency of what they do.
So a Decentralized system provides them both. A Decentralized system gives us a lot of financial freedoms and gave us the authority of our own money, unlike centralized currency.
The decentralized system is important like we even talk about one of our previous lectures about centralized social media like Facebook and Instagram and Decentralized social media like STEEMIT. In Centralized social media we don't have the freedom we get block or banned for days or week and even they can delete our account which can cost us our years of hard work but in decentralized social media nobody can delete our account and nobody can block us for days, we also can earn from Decentralized social media and we have the freedom to talk here unlike the centralized social media.
And then the main part of the decentralized system is because of that there will be more efficiency in people work and businesses. The transactions will speed up, everything will be transparent.
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What affects the value of cryptocurrencies?
There are actually many things that can affect the value of cryptocurrencies. But on the other hand, we can see that the crypto market is so volatile that nobody can say that when it goes up and when it goes down. The worth of Cryptocurrencies is constantly given by the market interest they have, if the buy offer is more prominent than the interest in deals, the cryptocurrency will build its worth, if the inverse occurs, it will bring down its worth, however, it additionally depends. The rule of market interest, when more individuals are putting resources into a digital currency, builds its worth, yet nothing ensures. So if the demand for the asset will increase and the supply will stay stable the value of the cryptocurrency will increase and vice versa.
The other thing that affects the value of cryptocurrency is influential people. As everyone sees what happened to Bitcoin when it was on $20,000 and then the day Elon Musk tweet about it, the price went to the top and then stops at $70k and it was also because of the Elon musk tweet as he says that his company will now not sell tesla from bitcoin. And then the market drops. So influence also make a big effect on the crypto market.
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4. Why can't everyone be a miner?
Being a miner requires a lot of things such as full knowledge about the structure of mining, the proof of burns, the proof of stake, the proof of work, and many other things. So not everyone can be a miner.
Mining requires much technical knowledge about mining, as in mining one has to complete the algorithms, solve blocks, puzzles and mostly because of it most people who went to mining came out in the loss. As mining requires a good budget, high skills, patience, and a cool place as in mining the system mostly got so heat up and the most important thing the electricity. The research I was reading shows the energy bitcoin mining is taking can light up the whole of Switzerland.
To be a miner you need certain skills to be able to solve the puzzle, blocks, and difficult algorithms involved in mining, so not everyone is capable of doing this, and not everyone can be a miner.
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5. Why can cryptocurrency transactions be called more transparent?
The cryptocurrency transactions are called more transparent because everybody can see the transaction one person make as if we see the STEEMIT platform we can see that we all can see each other things like how much they have got an upvote and how much STEEM or STEEM DOLLAR they have right now, it is all because of transparency.
As it is more transparent because of the person-to-person transactions and no other party is involved in it like the intermediaries are involved in centralized currency.
And the freedom the cryptocurrency transactions gave is on another level as they are all working under a decentralized system so it gives it more transparency.
Also, the cryptocurrency transactions are fast, and safe to finish for the fulfillment of the customer since the trades work through a wallet that goes probably as an augmentation so the trading of sets, and this is selected the establishment of blockchain data through a code, so that make cryptocurrency transactions be more transparent.
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6. Explain how the development of cryptocurrency in your country?
In my country #Pakistan till 2020 the cryptocurrency was banned and some people used to work in the cryptocurrency in hiding, even I used to work in STEEMIT and I was not able to take me earning, so I had to take my earnings through a wrong way which I never wanted.
But that was in past as after that here is a person name Waqar Zaka in our country he files a case against this ban and then he won that case and the cryptocurrency became legal in our country.
After that now he is working to give the education of Crypto to Pakistan's people and educating them and trying to transform our country.
He is now also been appointed as a crypto expert by our government and now he is working on Pakistan's own crypto, but before that, they are going to make the cryptocurrencies of our 4 provinces by their names. So I think this is a huge step and in this 1 year of time, thousands of people of my country has come into this system and learning about this system.
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7. Conclusion
So yeah that was it, I hope I covered everything the professor asked for. And if @levycore you found is missing or I didn't tell it correctly, so you're the professor you have the right to correct me hehe. Will keep an eye on the next wonderful lecture.
Regards,
@maazmoid123