Crypto Academy Season Two Week 6: Homework Post for @levycore: Learning about Cryptocurrency

Dear Sir,
I am glad to submit my first assignment on steemit crypto academy. My homework submission is below.

Technology is growing rapidly and mostly activities have become digital including payments for goods and services. Inplace of paper, coins, assets, cryptocurrencies have become a major means of payment of goods and services online due to the rapid growth in technology. Some cryptocurrencies are; bitcoin, ethereum, litecoin, steem among other cryptocurrencies.

1• What is the fundamental difference between Cryptocurrency and the conventional financial system?

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There are lots differences between cryptocurrency and the conventional financial system.Below are some fundamental differences between them;

• The major difference between them is that cryptocurrency is decentralized and the conventional financial system is centralized. Decentralization means with cryptocurrencies there are no central authorities regulating it and does not need third parties such as banks and the government during transactions, the transactions is peer to peer. But with the centralized means that is, the coins, papers there are central authorities regulating it with rules and regulations third-parties such as banks and the government are involved in transactions.

• Secondly, in terms of security, it is more secured using cryptocurrencies than the conventional financial system.With the use of the conventional financial system the security requirements entails alot, one is required to provide personal details, ID cards and a lot during transactions because of fraudulent activities and due to that personal details being provided when transacting business online can be hacked by a fraudster. But with cryptocurrencies there is enough security therefore it is difficult for a malicious user to hack and also every transaction is recorded in a blockchain(history of transactions, time of transactions and the hash code used in the former block) and its safe from identity theft.

• In terms of the usage, it’s easy and flexible using cryptocurrencies as compared to the conventional financial systems. With cryptocurrencies the limit in its usage is very high that it is not possible to reach it limits of usage hence there is no room for inflation as compared the conventional financial system where there is a limit of print out thereby when it’s usage is beyond limit it can cause inflation. In terms of transactions cryptocurrencies is between peer to peer and it can used at anywhere, anytime and by anyone but with the conventional financial system there are restrictions and for instance noted and coins of another country cannot be used to transact in other countries unless it is changed into the currency accepted in that country.

• Technicalities in usage, with cryptocurrencies one will need some form of skills and knowledge to be able to use it in trading online but with the conventional financial system it does not really need an technical skills to be used in trading online.

2• Why is a decentralized system needed?

With decentralized system, transactions are easier because transactions are peer-peer basis(buyer and seller) and it does not involve any third party such as banks and the government. Since it is not regulated by rules and regulations laid down by government this makes it’s usage is flexible. Also there are no bank policies and fees are involved in transactions and no requirement of personal details during transactions which can lead to identity theft. There is also no room for inflation, secured and it can be used in anywhere without any geographical restrictions.It is also fast transacting business with cryptocurrencies.

3• What affects the value of cryptocurrencies?

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The value of cryptocurrencies can be affected by demand and supply of the cryptocurrency.The high demand for a cryptocurrency will cause the value to increase and low demand will reduce its value.
Also the popularity and the mass adoption of a cryptocurrency can increase its value because a lot of people will be trading with it and the more it’s being used in trading and known, the more the value rises.
The production cost of a cryptocurrency currency interms of the energy geared into its mining can raise the value of a cryptocurrency. For instance Bitcoin more resources and energy being put into its mining and this has caused the value of Bitcoin to rise above other coins.

4• Why can't everyone be a miner?

A miner is one who solves complex mathematical calculations to add blocks to the bockchain system and receives commission for their services. When there is a transaction between the buyer and a seller, the transactions occurred are recorded on that network and these computers are managed and operated by the miners who record and supervise the transactions that has occurred on the web. To be a miner you need to have special and technical knowledge and skills which entails alot therefore not everyone can be a miner.

5• Why can cryptocurrency transactions be called more transparent?

With cryptocurrencies when transactions are made, the transactions are being seen by other people trading but within identity of the parties. Every user on a blockchain can view transactions that has occurred on the blockchain because these transactions are made public on the blockchain but the identity of the parties involved in the transactions are hidden due to security reasons.

6• Explain how the development of cryptocurrency in your country?

In Ghana, the development of cryptocurrencies is not as compared to the conventional financial system are the main means of transactions in the country. In Ghana the use of cryptocurrencies is not legally accepted in transactions(buying and selling) but the Bank of Ghana has drafter a bill that is the payment systems and services bill which in future we hope it will enable the use of cryptocurrencies in Ghana. The use cryptocurrencies is transactions is not legally accepted in Ghana.

Conclusion

I am glad to have partakes in this assignment by professor @levycore. Technology is rising at a faster rate and we are hoping that the use of cryptocurrencies will be legalized in many countries so that it can be used to trade without any restrictions.