Bitcoin, Cryptocurrencies, Public chains | Steemit Crypto Academy Season 4 - Homework Post for Task 5

in SteemitCryptoAcademy3 years ago (edited)

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Question 1
What Is Cryptocurrency and How You Would Like To See Cryptocurrency In The Future?

A simple definition is that a cryptocurrency is a form of payment that is exchanged for goods and services. Look at it this way. Remember when you are younger. You go to the amusement center and you give the cashier a particular amount of money and they give you a particular number of tokens that you could use to play the arcade games. That's how cryptocurrency works. You exchange real money for cryptocurrency which you can use to buy and sell things online in many parts of the world.

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A lot of people see cryptocurrency as a hot new investment because of how much value cryptocurrencies have also lost a lot of value in that same time. For instance, in December of 2017, one bitcoin was selling almost $20,000. Fast forward a year later in 2018, 1 Bitcoin was selling for $3,000. In the year 2020, 1 Bitcoin was selling for $13,764, and that's the nature of Bitcoin and other cryptocurrencies. They tend to fluctuate up and down thereby making it a bit of a volatile investment.

I believe in a couple of years, cryptocurrency will be adopted in all countries of the world. Even in a decade, cryptocurrency has been widely adopted, and in 10 years to this time, it will be adopted even in some countries that still some doubt about it.

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Question 2
What Is Bitcoin and what was the Aim Behind Bitcoin Invention? Is Cryptocurrency Good For A Business To accept As Payment? Why?

Bitcoin is decentralized, meaning its distribution and exchange are not control or regulated by a government or other authority, and the technical side of time is also very different. Traditional currency goes through a central payment processor like your credit card company but all Bitcoin transaction whether you are purchasing goods or just send Bitcoin to a friend, they are processed by a network of the computer running special software.

Whenever a transaction occurs, the network record the sender and receiver's Bitcoin addresses and the amount transferred enters it into a ledger or record called a blockchain.

The aim behind the bitcoin invention was to get rid of the parties because those third middlemen created data asymmetries and that always required trust that simply was not there.

Cryptocurrency is a good method of payment for businesses because it is very fast, and only you can access your funds. You don't have to be afraid because no government will free your account or confiscate your holdings. Cryptocurrency is also very cheaper to use than traditional wire transfers.

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Question 3
What Is Public Chain and What will be the Advantages and Disadvantages of Public Chain?

A public chain is a decentralized network that permits everyone who will like to join the network to participate in the validation of transactions for rewards and their reward could be a transaction fee or the cryptocurrency of the network.

Public chain as the name suggests, to be part of this blockchain you do not need permission from anyone. You can join as a participant in the pubic chain.

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Advantages of Public Chain

  • It gives very everyone permission to the network, in other words, it's decentralized. Everyone has access to the data of the chain any time and from anywhere.

  • The entire data of the chain, that is the exchange and transactions are encrypted cryptographically, therefore, making the whole network safe and very secure.

  • Anonymity is one of the good advantages of the public chain because the miners and those engaging in the system remain unknown.

  • As the name suggests, it is a permissionless chain which means every data is very visible to all users of the network.

  • It provides quick and easy transactions because it is permissionless and doesn't require a third party, it therefore makes quick.

Disadvantages of Public Chain

  • Despite the fact that it is a good sign that the other person you are trading with is unknown, this can also be problematic. If there is fraud or someone wants to track down the other people which are trading, so the case of a public chain, it becomes very difficult.

  • In case there is a fraud or someone wants to trace down the parties which are trading, in the case of the permissionless blockchain, it becomes difficult.

  • The public chain such as Bitcoin operates on the principle of PoF where the users of the network have to love the difficult puzzle. It has to do with a lot of resources.

  • Public chain provide limited block size.

  • In the public chain, the users of the network do not need to prove his/her identity.

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Conclusion

The drawbacks of public blockchain networks make it a questionable matted for a lot of companies. They believe that it isn't suitable for them to make the public chain a platform for providing business solutions. These disadvantages are made Ethereum which is a public chain to be directing its consensus mechanism from proof-of-work to proof-of-stake.

I believe even those companies and some countries that are still some doubt will adopt the idea of cryptocurrency and blockchain.

Thank you professor @stream4u for the wonderful lecture.

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