Steemit Crypto Academy Contest / S2W1 - How Cryptocurrency has Shaped the Financial Realm. What is Its Future? by @mccoy02

Hurry we are presented with another interesting opportunity to engage with community members to share our experience on crypto-related topics here I will relate with my readers how cryptocurrency plays an important role in the financial realm.

The inception of cryptocurrency will be traced back to 2009 when the first digital virtual currency whitepaper was published by an unknown programmer Nakamoto Satoshi, cryptocurrency is a virtual digital currency that is not issued by a centralized government it's consists of cryptographic encrypted data that make the network secure against external threat, it is not directly controlled by centralized authorities which makes it more decentralized and accessible for everyone, there are no geographic barrier or segregation of usage, anyone anywhere can explore cryptocurrency and make seamless transaction across countries without the need of middlemen to complete block transaction.

What makes cryptocurrencies unique is the fact that they can not be duplicated, their written codes are immutable and run round the clock on a transparent distributed blockchain ledger which keeps all records of transactions in a secure source that can be accessed through a public ledger ( block explorers ) we can conclude by saying cryptocurrency is digital money for all, a self-custodial asset for users to control their money.

Cryptocurrency vs conventional currencies

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The above picture depicts cryptocurrency as a simple store of value against conventional gold, billion dollars worth of BTC can be stored in a single hard drive, while gold occupies/require more space.

Cryptocurrencies are the opposite of what conventional currencies are, here I will compare both currencies to give my readers clear insight into what both currencies are.

1. Finite supply; Bitcoin a pioneering cryptocurrency with a maximum supply of 21 million units that will ever exist and will continue to increase in value based on users' demand and supply making crypto a capped supply token that will not be printed continuously against excessive supply.
   While conventional currency has over the years, been known for its unlimited supply the number of total circulating conventional currencies like fiat, gold, and silver can be said to be infinite this contributes to hike inflation rate in the world, and a centralized banking system can print conventional money, Bitcoin solves this.

2. Store of value; the image above clearly portrays cryptocurrency as a store of value which is one of the sole aims of introducing bitcoin and other altcoins.
   While conventional currencies require tons of space for storage, holding or storing physical gold can expose one to threats which include robbery, moving cash can also be a tedious task as they are heavy and requires attached security personnel to move large cash from one place to another.

3. Intrinsic value; cryptocurrencies drive their value from their use cases (adoption ) the more people get on board and use crypto for their daily activities the more value is placed on the digital token.
   While conventional currencies are backed by the regulatory official paper money has value because the government place value on them which are social security.

From the above-listed comparison, we can deduce the difference between cryptocurrencies and conventional currency one can be stored easily while the other requires more space, one is a store of value and has limited supply while the other has an infinite supply.

Some distinctive innovations of cryptocurrency

Every new invention comes with a unique attribute for cryptocurrency we have several distinctive innovations that make cryptocurrency special.

1. No third party interruption; there are several restriction on users when conducting transactions between different countries for example a user in Nigeria willing to send or receive money from a UK based citizen needs to undergo a rigorous process of paperwork, cryptocurrency innovation fixes this and eliminates the need of going through intermediary agents to send money to users in different countries.

2. Users' anonymity; cryptocurrency is designed to keep users' transactions private although being an open-source user's information like names, and location is not required to execute transactions with other users.

3. Low transaction fee; crypto-token built on tron network, binance smart chain allows users to complete low transaction with a little amount charged for when sending money to other users.

4. Cross-border transactions; there are no country or geographic location restrictions when making transactions with cryptocurrencies

Downsides of the above-mentioned crypto innovation

As most users suggest crypto has negative sides one of which is money laundering activities which are also common with conventional currencies.

1. The lack of use of intermediate middlemen when completing crypto transactions can be used to perpetuate unsolicited acts from users who might take advantage of this process and conduct money laundering.

2. Anonymous transactions can also increase fraudulent activities which are quite popular with cryptocurrency

3. We have ethereum a leading blockchain that has a high transaction processing fee which is a downside of crypto innovation as well.

4. High market volatility; cryptocurrencies are known for their volatility which makes the market very unstable and can cause investors to lose a good amount of their investment.

With the above distinctive crypto innovation and downside, it is left for interested parties to use the network judiciously.

Points 1 and 2 on the cryptocurrency downsides I've highlighted can be summed up as cryptocurrencies being used as a tool for fraudulent activity

This has been a major problem leading many users to refrain from the use of cryptocurrency users' transactions are not easily tracked down which makes this to be a complex, problem. for authorities although this has been the solid aim behind the crypto invention.

How it can be handled

• Crypto regulations; with flexible regulations on how crypto transactions should be conducted among diverse users will be a good starting point for tackling and minimizing fraudulent activities

• Know your customers; this is another way we can minimize fraudulent activity in crypto by getting users to verify their identity and location this methodize used in centralized exchanges.

Cryptocurrency is still at its early stage which means there is plenty of room for growth and development although with different regulations passed lately there has been much pressure which reduces the rate of crypto adoption from new users.

Sure I do believe in the future of crypto which will gradually be the future digital currency here are some of my reasons.

1. Self banking; cryptocurrency means self custody it is very flexible and allows people to be in charge of their money this is the freedom that comes with the use of cryptocurrency there are no restrictions on how or who to send your money to.

2. None duplicated; the rate at which counterfeit money ( fiat) is circulating in the world is very alarming Bitcoin fix this with cryptocurrencies like bitcoin which does not allow double-spending or duplication of its token there is no doubt crypto will be the future currency.

3. Finite supply; 21 million units of bitcoin will ever exist which plays a vital role in maintaining a country's economy and tackling the inflation rate of a country.

4. One bitcoin equals one bitcoin; this is super interesting a general currency with the same value in price worldwide eliminating the need for world power currency and making all nation's currency equal with the same purchasing power.

Recommendation/Conclusion

Those who understand the concept behind cryptocurrency will agree it is here to fix the problem in a centralized system although being a digital currency does not make it free from bad reviews I would suggest before concluding on venturing into crypto you make due diligence research on the pros and cons attached to cryptocurrency.