Homework

1. What is cryptocurrency and how would you like to see cryptocurrency in the future?

INTRODUCTION

In the financial world, cryptocurrency is so overwhelming currently, due to the fact that people are getting more acquainted with it.

There are some misconception about cryptocurrency that I will like to address before i continue with this task.

• Cryptocurrency is a form of virtual asset and not a digital asset in the context.
• Digital currency in the actual sense is a currency generated using electrical energy transacted and stored in the virtual space.
  Digital currency can be regulated by the government, that is why i said cryptocurrency is a virtual asset because it is not regulated by the government.

CRYPTOCURRENCY

Cryptocurrency is a virtual currency which depends on cryptography encryption and decryption for validation of transactions, security of assets, and production of more coins.

Cryptography is a measure that assures the production security and continuity of cryptocurrencies.

It make sure that hackers don't have their way into the system, or siphon vital informatiin from the blockchain by the implementation of public and private keys.

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Public keys is an open address through which asset can be sent to a wallet. And with just this public key there can't be any form of compromise of our crypto assets.

Private key as the name implies is a must secure key, which should be made visible to the owner of the wallet alone.

The function of the private key can be likened to the function of our credit card pin because, if there be any compromise in this key, the user stands the chance of loosing his asset.

Bitcoin first introduce the idea of cryptography in securing assets.

FEATURES OF CRYPTOCURRENCY

There are peculiar attributes possessed by every cryptocurrency. They may include;

• Scalability: scalability in this context talks about the time.it takes in creating a new block for a blockchain.

• High level of security: blockchains possesses an elevated level of security because it uses encrypted public and private keys to ensure that informations are safe from hackers.

• Anonymous transaction: cryptocurrency transactions are kept anonymous because you cant trace from where an asset is coming from.

• Decentralization: decentralization talks about an attribute of blockchain whereby there is no central authority. i.e blockchain autonomy.

• ** Immutability**: due to the fact that blockchain is interconnected, transactions are irreversible and any mistake you can end up loosing your asset to the wrong wallet.

What is blockchain technology to cryptocurrency?

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Blockchain technology, to cryptocurrency is like a guardian. I blockchain technology, all nodes are connected to a server.

This eliminates the place of a third party giving every node equal rights.

Alteration of information on blockchain is like ly impossible because information are been shared to every node in the network.

ADVANTAGES OF CRYPTOCURRENCY

• Less exposure to hackers
• High level of security
• Rapid transaction
• Minimal transaction fee
• Various sector of the economy can be sustain with the idea of cryptocurrency.

DISADVANTAGES

• Encourages fraud due to decentralization and anonymousity of blockchain.
• Consumes high energy
• Hampers in scalability
• There is a higher tendency od blockchain security being over hyped.

CLASSIFICATION OF CRYPTOCURRENCIES

I will be classifying cryptocurrency based on value and/ or time of occurence.
I will be using a table for better understanding.

**Cryptocurrency cartegories	Classification
Alt coins	precedence
Shit coins	value
Stable coin	value
Meme. coins	values
Bitcoin	Value and precedence

• Altcoin: altcoins are coins other than bitcoin.
  Altcoins in cludes; ethereum, cardano, solana, binance coin e.t.c

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• Shit coin: shit coins are alternative coins that have no feasible purpose. Long term investors don't find shit coins interesting.

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• **Meme coins: meme coins are coins that derive their value from jokes and memes.

Theyimclude; doge coin, shiba inu,flooky inu, etc

CRYPTO WALLET

In the crypto space crypto wallet to cryptocurrency is like bank to fiat currency.

A wallet i a storage device either online or offline used in storing our wallets

The major types of wallets are;

1. Hot wallet
2. Cold wallet

Hot wallet: wallets connected to the internet are known as hot wallets.
The public address to which assets are been sent is made visible for easy identification.

The private address that is only accessed by the owner is also represented.
Some hot wallet like binance , trust wallet, etc are accessed through the app while lino and its likes are accessed via web.

Cold wallet: these are offline wallets ,more secured than hot wallet because information about them are not stored on any server and at such they are not prone to hackers.
Examples of cold wallets are Trezor wallets, Bit2 me wallets, etc.

Exchange in cryptocurrency

An exchange is a market place for cryptocurrencies. i.e where you can buy and sell cryptocurrencies.

Here you can either echange one cryptocurrency for another one or you can exchange a cryptocureency with fiat currency.

The table below shows crypto exchange rankings and the number of pairs

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Exchanges can also be classified as centralized and decentralized.

Centralized exchanges: these are types of exchanges that are been governed and controlled by a central body.

This type of exchange is rampant among crypto traders because of the high liquidity it provides.

Examples of centralized exchanges are; binance, coinbase, kraken, etc

** Decentralized exchange:** as the name implies, it is an autonomous exchange which is under the control of no central body.

Examples of decentralized exchanges are; pancakeSwap, UniSwap, SushiSwap, etc .

various areas of crypto technology.

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How would you like to see cryptocurrency in the future?

People over the years have been getting acqainted with cryptocurrency and to that effect i have n doubt that in years to come, cryptocurrency will take over the economy.

I will like it if countries accept crytocurrencies as legal tender.
If other countries of the world will follow the steps of El Salvaor in making cryptocurrencies their legal temder.

Another reason why i would like cryptocurrency to take over fiat, is to reduce Excesses of the bank sector.
Taking into consideration the merits of cryptocurrency over bank which include fast transaction, minimum or no transaction fee.

Since cryptocurrency has high security, i will help reduce fraud.

CONCLUSION

As the day goes by, more opportunity in crypto are made known to the public and to that effect i think it is high time we explore the space.

Thanks for reading, prof. @stream4u thanks for the teaching.