Steemit Crypto Academy Contest Season 2 Week 1 - How Cryptocurrency has Shaped the Financial Realm. What is Its Future?

Hello everybody.

Welcome to this post. I hope that all of you will be fine and good and enjoying your precious health with the grace and blessings of Almighty Allah. Today, I am here to participate in the Steemit Engagement Contest Season 2 and Week 1. This publication is actually in the SteemitCryptoAcademy community and the topic of discussion for today is How Cryptocurrency has Shaped the Financial Realm. What is Its Future?. So, let's start the discussion without any waste of time.

_{Image Created By Canva}

---

Brief Overview of the Cryptocurrency

---

Cryptocurrency is the most trending term in social media and in the financial world as well. Cryptocurrency, as referred to by the name, is a type of currency that is 'private or hidden'. Here, what we take from these words is that cryptocurrency is the type of digital currency that is private enough to be called crypto. I think this concept is somehow confusing for many of the readers so I will simplify and do it as more as I can.

Basically, cryptocurrency is a modern type of currency that is used as a digital currency and can be used for payments and marketing purposes as well. We know that currency is very important for all of us as we need currency for the purchase of our basic needs. If we look at the history of the currency we will find that in past, there was no concept of currency, a few thousand years ago.

In past, people used to exchange the assets or items with each other considering the equality between their values. After that, the coins were developed as a form of the primary currency. The world progressed and the currency is converted into the form of paper money that we still use now. Going on, the currency is also converted into the card currency, ATM, etc. But now, the currency is converted into its digital form and a new term is developed which is called cryptocurrency. The concept of cryptography and currency is merged to form the cryptocurrency.

History of Cryptocurrency

The concept of the cryptocurrency can into view when the first-ever cryptocurrency, Bitcoin was created by Sir. Satoshi Nakamoto in February 2009. This was the birth of the cryptocurrency when the cryptographic techniques and the algorithms were combined and managed in a way to form the successful decentralized digital currency, Bitcoin.

_{Image Taken From}

After that, hundreds of thousands of cryptocurrencies have been developed in the form of coins, tokens that are actually known as altcoins. The main reason behind the creation of the cryptocurrency was to eradicate the central authorities from the transaction-making processes and the storage of the money. Cryptocurrency is the advanced form of currency and is a more scalable, secure, efficient, cheap, and trustless system.

Features of Cryptocurrency

As we have already discussed that cryptocurrency is the decentralized form of digital currency. We can use the cryptocurrency for various purposes but we can not even feel or touch it physically. There are digital wallets that are known as crypto wallets where these digital assets can be stored.

For the exchange of these digital assets, there are specialized platforms known as Crypto Exchanges. Their users can exchange one cryptocurrency with another and also can trade cryptocurrencies. The most impressive feature of the cryptocurrency is that there is no involvement of any central authority while making transactions in the cryptocurrency. We will discuss more features in the next sections.

---

Comparison Between Cryptocurrency and Conventional Currency

---

Conventional Currency means the type of currency that we mostly use in our daily lives, including paper currency or coins. As both, cryptocurrency and conventional currencies are used for payment purposes, there are some similarities, as well as, dissimilarities between both terms. These similarities and dissimilarities are discussed below.

Similarities

Following things are common in both, cryptocurrency and conventional currencies.

• Usage:

The usage of the cryptocurrencies and the conventional currencies is almost the same as we can store them as a source of saving or for future use, in this way they act as valuable entities. Secondly, we can use cryptocurrency and conventional currencies for payment purposes.

• Values/Prices:

Both, crypto and conventional currencies are given particular values. The values that are specified for these currencies are accepted by the users in order to use these currencies for savings or payments. Both types of currency have the ability to retain their prices according to the progress of the time or world.

• Digitalization:

Both types of currencies can be used in the form of digital assets. The fiat currencies can also be used as paper or coins, and could also be in the form of digital assets that are easy transactable.

Differences

There is a number of differences between cryptocurrency and conventional currency. The major differences between them are discussed below.

---

• Nature of Systems (Centralized or Decentralized):

Cryptocurrency is a decentralized digital currency system. This means that the control of their transactions, the users' funds, and the management of the cryptocurrency is not in the hands of some particular parties or persons. While on the other hand, the conventional currencies are issued by the central banks of the respective governments, and transactions and activities are under the control of the governance or banks, the transactions are also verified and approved by the central authorities.

---

• Central Authorities:

The transactions that are made in the cryptocurrency do not need any permission or approval from the central authority or the third party. While on the other hand, we have to take approval from the central authority in the form of the banks' development for the approval of the transactions in the conventional currencies. In cryptocurrency, the users can proceed out and make successful transactions according to will and wish.

---

• Transaction Processing:

If we have to make any transaction through the banks, we have to waste our time in the bank for sending or withdrawing the funds and this process is also very complex. While on the other hand, users can make their transactions efficiently and effectively without the need for any wastage time. We can also withdraw and send the funds in the form of cryptocurrency wherever and whenever we may need them.

---

• World-Wide Transactions:

As the transactions in cryptocurrency are peer-to-peer, users can also make transactions throughout the world, to their near and dears without any problem or complex mechanism. While we have to go through the complex KYC process of the international banks if we want to transact the money in the form of conventional currency. That's really a huge difference.

---

• Transparency:

The brief information about the transactions that are made in the cryptocurrencies is properly stored and recorded in the respective blockchains, in the form of blocks. While on the other hand, the banks use conventional technologies and techniques for the storage of the transactions temporarily. We can simply say that cryptocurrencies are more transparent than conventional currencies and this is a huge benefit of cryptocurrencies.

---

• Security:

Another important point to be considered here is that cryptocurrencies are more secure and safe than the conventional system due to the involvement of decentralized blockchain technology in cryptocurrencies. While on the other hand, the centralized system of the conventional currencies is less secure and stable than the decentralized one that is used in cryptocurrency.

---

• Creation of Currency:

The creation of the conventional currencies in the form of paper is also a very complicated process as it may consume a lot of energy as well as raw materials. While cryptocurrencies can easily be minted if we have proper hardware devices or high-level computing systems.

---

• Satisfaction of Users:

As the users have to put their funds in the hands of the central authorities if they are saving their funds in the banks so they have to trust the company or team of the bank in order to put their money. While in the case of cryptocurrency, the users do not have to trust any team or management as they just have to save their funds in their wallets whose private keys are in their own hands. So, the people are more satisfied with the case of cryptocurrency as compared to the conventional currencies.

---

---

Innovations of Cryptocurrency and its Downsides

---

There are many innovations that cryptocurrency has brought to the financial space. Also, there are some downsides to cryptocurrency. These innovations and downsides of cryptocurrency are discussed below.

Innovations

The innovations that cryptocurrency has brought to the financial space are listed below.

---

• Decentralization:

The first and the most important innovation that cryptocurrency has brought is the concept of decentralization. Decentralization means that the funds and transactions are under the control of the users and not the central authorities. Users can control their funds according to their will. In short, the dependent conventional system has progressed to the independent decentralized system and this is really a huge innovation.

---

• Security and Privacy:

Another impressive innovation that cryptocurrency has brought to the financial space is the enhancement of the security of the funds of the users and the privacy of the identity of the users. The security of the funds has been increasing with the involvement of private keys, public keys, and different cryptographic elements. The cryptocurrency system keeps the anonymity of the users that have made transactions and thus the privacy of the users remains satisfied.

---

• Introduction to the Blockchain Technology:

Another most important innovation of the cryptocurrency is that the cryptocurrency has introduced the financial world with the blockchain technology and this is really a huge benefit as the data can be stored permanently in the blockchains that can never be edited or changed. The records of the users can be properly managed and maintained through the use of blockchain technology and this thing also helped in improving the security and privacy of the system.

---

• Low Transaction Fees:

The transaction fees of the cryptocurrencies are must lower compared to that of the conventional currencies. There are many blockchains developed in the crypto space where the transaction fees are almost negligible and we can consider them as free. For example, the transaction fee of the Tron blockchain is almost 1 TRX which is very low.

Downsides

As we all know that nothing is perfect in this universe so there are also some drawbacks of the cryptocurrencies that are as follows.

---

• Instability of Prices:

As we all know that the prices of cryptocurrencies are not stable at all. The prices keep on increasing and decreasing and these fluctuations in the prices of the cryptocurrency create a very critical situation for many crypto traders. The instability is actually due to the imbalance in the supply and demand of the assets in the market. Some of the Large Hands can be able to take huge benefits but they can harm the small investors.

---

• Scalability:

The scalability problem of many cryptocurrencies is really a huge problem for many traders. Actually, this is due to the Blockchain Trilemma. If the blockchains ensure their decentralization, they have to sacrifice the scalability of the network. As the number of validating nodes increases, the number of transactions is also increased in parallel and thus it can put a heavy load on the network. While centralized systems are much more scalable.

---

• Inability to Undo Transactions:

The transactions that are once proceeded in the cryptocurrency blockchains, can never be edited or modified and this thing creates a huge loss for the users in many cases. For example, if a user puts a missing address of the receiving account during making a transaction, he will never be able to edit the address, if one is done. Also, there is no proper contact of the core team in order to contact them during such cases.

---

• Crimes Opportunities:

The decentralized nature of cryptocurrencies has created many crime opportunities for the ill-minded person. Some bad people took the advantage of the decentralization for performing various illegal activities such as money laundering, black money, and many more. Moreover, scammers are wandering here and there in the cryptocurrency world.

---

---

Handeling of the Downsides

---

Let's discuss some important points in order to handle the problem related to cryptocurrencies. Some of these points are discussed below.

---

• For Reducing the Scam Opportunities:

There should be a proper agency for the tracing of high-volume transactions in the blockchain. For this purpose, the IP address of the senders should be monitored and stored properly so that we can approach the scammers in the case of any scam or misuse of the blockchain.

---

• Undoing of the Transactions:

To improve the working and the effectiveness of the cryptocurrency, there should be an option to undo the transactions so that the users can access that option in the case of any mistake or missing. For example, if a user sends an amount to the wrong address then the system must check the receipt address if it is active or inactive, or unavailable. So, there would be a chance for the user to recover his loss.

---

• Improvement of Scalability:

For the improvement of the scalability of the cryptocurrency networks, the blockchain should reduce the requirements to be a node. For this purpose, the blockchains may adopt the Delegated Proof of Stake and other effective mechanisms so that the number of nodes increase and thus the TPS of the blockchain also improve. Also, the blockchains can adopt the Lightning Network technology for the improvement of the scalability of the network.

---

• Contact of the Team:

The developers or the companies of the cryptocurrencies should be encouraged to provide some valid contacts to the users so that they can contact the team in the situation of any inquiry or any other problem.

---

---

My Views About the Future of Cryptocurrency

---

Yes, I strongly believe in the successful future of cryptocurrency and blockchain technology as well. I am very much sure while writing this post that people always need freedom. In the case of cryptocurrency, we know that the use of cryptocurrency can make the people independent and free from the headache of any central authority or the central controlling unit while making the transactions.

It is very interesting to know that many steps have been made to improve the future of cryptocurrency. Some of these steps are listed below.

• Many of the governments of various countries are supporting and regulating the cryptocurrencies in their states and this is a very positive factor for the growth of the cryptocurrency, I think.

• It is very much interesting to know that the Crypto ATMs are also developing in various countries from where the users can withdraw their crypto funds easily and efficiently.

• Many popular organizations, brands, and companies (i.e. Tesla) are taking interest in cryptocurrency and this thing is also a positive factor in this regard.

• The use cases of cryptocurrencies are also increasing day by day. Now, cryptocurrency and blockchain technology have also entered the medical, banking, education, sports, etc. departments which is also a huge benefit for the growth of cryptocurrency.

---

Considering the above-mentioned points, we can hope for a very impressive future for cryptocurrencies and we wish to see the rapid growth of cryptocurrencies. In this regard, more and more governments should have to regulate the cryptocurrencies in their countries, and also the popular brands, and organizations must have to show their warm interest in the cryptocurrencies.

---

---

Conclusions

---

Cryptocurrency is a decentralized digital currency that can not be felt physically but can be used worldwide for payment purposes. The cryptocurrency was developed to overcome the defects in the conventional currencies system such as the security and privacy problems, dependency, etc.

Cryptocurrency removes the involvement of the central authorities while making the transactions and storing the assets. This thing is really impressive for many finance experts and we can hope for a very glamorous future for cryptocurrencies.

---

So, that's all about the contest of the Crypto Academy for this week. I hope that all of you will like this post. I would like to invite my friends @msquaretwins, @msquaretk, @badmus-official, and @abdu.navi03 to take part in this amazing contest.

---

Participant: @steemdoctor1

---