Crypto Academy Week 14 || Homework Post for Professor@levycore || About Cryptocurrency.

Hi Steemians, I'm @ericanthony and this is my homework post for Professor @levycore's lecture on Cryptocurrency. Hope you enjoy it. Thanks.

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1. What is the fundamental difference between Cryptocurrency and the conventional financial system?

Differences Between Conventional Financial System and Cryptocurrency.

Over time conventional currency has become less valuable as a result of inflation, championed by low productivity and continual money minting (Inflationary).
While the cryptocurrency on the other hand is increasing in value as a result of more and more people desiring to have a hold of it or as a medium of exchange. It's becoming more valuable because for example, Bitcoin production (minting) is capped at 21 million. Which means everyone can only share the 21 million without printing more. (Deflationary)

Conventional Currency	Cryptocurrency
The government issue conventional currency which are in return regulated by the central authority. It is also legal tender in that it is the official means of finalizing transactions.	They are virtual assets that act as a medium of exchange and as such, the government has no control over it.
They are physical as they can exist as a coin and notes and as such have a physical feel.	They are virtual and as such not possible to have a physical feel.
They are on both virtual and physical. You can make electronic transactions and as well exchange physical cash.	They are only in virtual form, since they are the creation of computers.
They are not really capped, they are produced continually as the need arises.	They are capped, which means that they are in limited supply. for example, BTC is capped at 21 million.
They are so versatile that they can be stored in various forms.	Since they are virtual, they can only be stored in digital wallets.

1. Why is a decentralized system needed?

It is needed for the following reasons:

1. Trust; this is a greater motivation for the community as they can exercise their views for the common good of the community.

2. The consensus that exist in any decentralized system, provides a very good environment to raise competent managers.

3. Due to the absence of approval from the central authority, decision making becomes fast.

4. Shared Responsibility. It reliefs the top managers the challenge of making every single decisions, making every one more productive.

5. It encourages individuals to focus in their areas of specialization for better productivity.

1. What affects the value of cryptocurrencies?

1. Scarcity.
   The value of cryptocurrencies increase with demand. This happens as a result of increase in adoption by institutions. Likewise, decrease in value as a result of few or inadequate demand for the crypto.

2. Mining cost.
   The cost of mining cryptocurrencies is one of the major determinant of the crypto value.
   Example, the value of BTC can be related to the cost of is production (mining).

3. Mass Adoption. Increase in cryptocurrency adoption will most likely lead to increase in value.

4. Utility of the cryptocurrency.
   The use-ability of the cryptocurrency within the blockchain can affect its value.

5. The availability of the cryptocurrency in the exchange market.

1. Why can't everyone be a miner?

First, what does miners do? Their job is specifically to solve unconfirmed transactions (blocks) in the blockchain through the verification of the hashes and when the block is verified, the confirmed block will be added to the blockchain. So, everybody cannot be a miner because it requires the followings to be a successful miner:

1. Specialized computers
2. power supply
3. Mining software
4. Mining pool membership
5. Competitive skills

None of the above requirements comes cheap as it's not everybody can afford them, both in training/skills, acquisition and even becoming a member of a mining pool.

1. Why can cryptocurrency transactions be called more transparent?

It is because, cryptocurrencies are digital/virtual assets that are based on the blockchain technology.
Blockchain technology has provided auditable and valid ledger of transactions of cryptocurrencies. It is so transparent that anyone can join the network and as a result view all the information (history) in that network.
By the encryption and control measures of the blockchain technology, transaction information's are stored and safeguarded in such a way that it cannot be altered without recording the changes made.

6.Explain how the development of cryptocurrency in your country?

There has been an increase in growth in the adoption of cryptocurrencies in Nigeria over the years, which has made the country the largest crypto market in Africa.

Lot of factors lead to the massive adoption of cryptocurrencies in Nigeria, one of which is the Government strict foreign exchange laws that many said made Nigerians to turn to alternative currencies of which cryptocurrency is better option at the right time.

The naira decline in value and rising inflation also contributed to the adoption of cryptocurrencies as an alternative.

However, the Central Bank of Nigeria (CBN) on the 5th of February 2021, came up with a letter addressing all the financial institutions that it has prohibited them from dealing with cryptocurrencies and all the related transactions and payments. It went further by instructing the financial institutions to identify individuals and entities who transact with cryptocurrencies or operate crypto exchanges and close their accounts.

This directive by the CBN did cause apprehension and uncertainty in the country. Some of us that is still new in the crypto world panicked and started selling off our crypto assets through peer to peer at a ridiculous offer as at the time.
However, we still maintain peer to peer trading with the right offer.

1. Conclusion.

Decentralization has ushered us into fast, secure and transparent transactions that we have never seen before. Thanks to blockchain technology that has made it possible. Cryptocurrency is no doubt the future. However, it needs lots of improvement to be able to increase its adoption worldwide and emerge as the only currency of choice. When this happens, we will be able to build an inclusive, transparent, and accountable digital economy.