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

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Are you think of booking for that next holiday and you don’t know how? The online travel agency doesn’t take a direct transfer and you don’t have a credit card.

Think no longer as you can now use a cryptocurrency like Bitcoin to pay for that dream holiday

AN OVERVIEW TO CRYPTOCURRENCY

Cryptocurrency is a digital or virtual currency and operates on blockchain technology.

Blockchain technology is a set of blocks which record set of information and transactions;

• Who made the transaction and to whom
• The amount of the trade

The trade is then stored in the form of a digital ledger which is then distributed across the network of computers. This means that the data is replicated and stored on each node across the network which makes it so much safer. The data is then verified and validated by each node after which the process is concluded.

Cryptocurrency was designed as an online method of payment for good or services. This method of payment was introduced in 2013, nearly ten years ago by Satoshi Nakamoto.

The “crypto” stands for “cryptography” which is used to secure the data so that a third party like hackers cannot access it.

Cryptocurrencies are influenced by a lot of people, globally hence that a lot of companies are investing into cryptocurrencies.

Cryptocurrency is changing the finance industry globally. Anyone with an internet connection can trade, borrow or spend money. All that you need to do is to create an account or wallet on any of the cryptocurrencies.

The acceptance of cryptocurrency as another medium of payment is continuing to grow worldwide.

Let’s take a closer look at what makes cryptocurrencies so much different than other conventional currencies.

CRYPTOCURRENCIES VS. OTHER CURRENCIES

They say that “less is more” therefore I am going to take a look at the difference between cryptocurrencies and other currencies in a simple manner.

Controls	Cryptocurrency	Other
Centralized	❌	✔
Third party appearance	❌	✔
Control external authority	❌	✔
Transactions can bounce/fail	❌	✔
Transfer limit	❌	✔
Account can be hacked	❌	✔
Failure of a server	❌	✔
Low transaction fees	❌	✔
24/7 access	❌	✔
Extra cost for Int. transactions	❌	✔
Paperwork	❌	✔

With the above in mind one can understand why cryptocurrencies are backed by their users, they have faith in this form of payment.

It is also clear that other forms of currencies can become vulnerable over time and I do believe that inflation, theft and hacking will play a big part not even to mention money laundering.

DISTINCTIVE INNOVATION OF CRYPTOCURRENCIES AND THE DOWNSIDES

Distinctive innovation can be compared to cars. Today a car is designed with a distinctive innovation like power steering. Tomorrow it will be a standard feature in most cars.

For me there are three distinctive innovations in cryptocurrencies namely;

1. Better control over finance
2. Faster
3. Accessibility

1. Better control over finances

Is this truly an innovation? For sure! I do believe that without third parties consumers can have better control over not only their finances but also the privacy thereof. We have seen that cryptocurrencies offers lower fees s which also results into a cost effective transactions. In today’s economy every cent counts not only when you make a purchase but also when you invest.

Downside:

On the downside is the price volatility of cryptocurrencies. This can hinder consumers to make that decision to make the move to have better control over their finance. This goes for using cryptocurrencies not only for a payment method but also for an investing avenue.

2. Faster!

People hate waiting whether it is to stand in a cue for a Starbucks coffee or for making an online transaction. One of the best innovations of cryptocurrencies for me is the quick and easy manner in which transactions happens.

Downside:
The downside is that “Oops”! So easily a transactions can be send to the wrong wallet and there is absolutely no way to reverse nor recover the transaction. If you are not extra careful when using cryptocurrencies as payment method you can lose your money.

3. Accessibility

According to data release by Statista there are currently 6.648 billion smartphone users in the world. This means that 83.72% of the total population is smartphone owners. It is predicted that soon the percentage will reach 90%.

Cryptocurrencies allows these users a way in which they can perform Frictionless, Fast and Furious transactions and the best part, without any human or third party intervention and at a cheaper rate.

Downside:
Availability of the Internet globally is a problem. With that forgotten passwords, stolen smartphones and accidental loss it can be more difficult to recover.

MAJOR PROBLEMS WITH CRYPTOCURRENCY AND THE SOLUTION

Problems are part of our everyday life and it is the same with cryptocurrencies. There will always be problems which needs to be addressed.

For some users the price volatility of cryptocurrencies is an appeal as with higher risks comes higher returns.
When we take a closer look at Bitcoin and the history over the years.

The price volatility was due to four main reasons;

1. User and investor sentiments
2. Government and other authority regulations
3. Hype in the media
4. Supply and demand

Solution: Educate! Educate! Educate!

Consumers, investors and governments must be educated. Price volatility is not new. In the 2008 financial crisis we saw the Dow Jones nearly collapsed. Price volatility is also not going to go away.

It is also of importance that cryptocurrencies try and eliminate rapid news cycles which can result into traders moving swiftly in and out of their trades which can cause panic.

Unfortunately there is currently no precise guide to measure crypto volatility.
2008 Financial Crisis. I do believe that as cryptocurrencies grows and develop it will reach maturity which will reduce the volatility.

“Fast” transactions can cause a problem. The only solution to this is to build a method or way in which the identity of receivers can be identified before the transaction is concluded. Is this possible? I have seen that the word never does not exist therefor I am sure that somewhere, somehow, somebody will come up with a solution for;

• Identification
• Reversing of transactions

Solution: Maybe something like a Decred Decentralized Exchange (DEX) with an exchange interface is something which can be adopted and changed.

Accessibility to the Internet is not a problem that crypto currencies can solve. What they can improve is what to do when passwords are lost or forgotten.

Solution: The improvement and innovative drive behind cryptocurrencies is what is going to make the stronger to be stronger and the weak to be weaker.

THE FUTURE OF CRYPTOCURRENCIES

I am a strong believer of social approach as the “rich and famous” has been followed by billions of year and it will not change.

What the famous has to say of cryptocurrencies can indeed move the markets.

In the world of the famous it is for sure that it is the “old bears” who is not in support of cryptocurrencies.

The support of crypto in general comes from the younger generation.
With a young and innovative person like Elon Musk supporting Dgecoin I for sure can see it becoming the first cryptocurrency in “space”.

Cryptocurrencies are here to stay!
Millions of people will still invest in crypto as it is so much easier and faster to invest in than normal stock. For me the investing in crypto and the presenting of cryptocurrency goes hand in hand.

The days of central banks printing money whenever they want to is over and it I clear the cryptocurrencies can play a vital role in the global economy.

A country with a successful cryptocurrency system can for sure be the leaders of the financial arena as early as tomorrow.
In addition, with the right system countries can potentially solve problems they are currently facing like corruption.

As a newbie to the world of crypto I've got one recommendation - Make Crypto Island a reality so that we can ensure the growth or our finance!

“There is no second best Crypto asset” Michael Saylor

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