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

A very good day to all my readers, I am very happy to come to you once again to partake in the second season of Steemit Crypto Academy engagement challenge. The topic to be discussed today is "How Cryptocurrency has Shaped the Financial Realm. What is its Future?". This topic is a very interesting one and I think I will enjoy talking about it very much. So why don’t you sit back and enjoy it too?

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I will start the post with an overview of what cryptocurrencies are, how they work, and a little bit of their history.

Satoshi Nakamoto, a group of people whose identity remains a mystery, in 2018 created Bitcoin. This was to help do away with the traditional banking system that was so centralized and did not give the people the freedom and convenience that they deserved.

Cryptocurrencies are virtual currencies that can be used to transact digitally and do not require approval and verification from third parties like banks. Cryptocurrencies are digital currencies which means they cannot be felt or touched.

Cryptocurrencies are free from the control of central authorities, they are secured by cryptography and can be transacted on a peer-to-peer system. Due to how decentralized they are, their users are anonymous and are given a lot of privacy. However, for transparency and security, transactions of cryptocurrencies are public for everyone to see and those transactions cannot be altered or forged in any way. This is made possible by Blockchain technology. This system records the transactions of the cryptocurrencies in blocks that are linked together to form a chain.

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Cryptocurrencies from the start were made to resemble and possess some characteristics that are similar to our conventional fiat currencies. They were supposed to be an alternative to the conventional currencies when it comes to payment. Some of their similarities are given below.

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Both currencies are a medium of exchange: we can use both cryptocurrencies and the conventional currencies to do transactions on either end (buy or sell)

Both currencies are divisible. We can divide them into smaller denominations, for instance, dollars can be divided into cents, and STEEM can be divided into as small as 0.0001STEEM

Another similarity between the currencies is their ability to keep their value, this allows them to be transferred and capable of storage.

We all know that both cryptocurrencies and conventional currencies come in different forms. Some of the various cryptocurrencies include; Bitcoin, Ethereum, Litecoin, STEEM, Tron, etc. Some conventional currencies include the US Dollars, Euro, Ghana Cedi, etc.

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Just like how similar they are, they also have their differences. I will tabulate them below.

Cryptocurrencies	Conventional Currencies
They are decentralized and without the influence of intermediaries or any centralized authorities.	they are very centralized and are governed by their authorities
They do not require third parties in their operations, their consensus mechanisms and the peer-to-peer system do away with them	they require third parties to validate or approve the transactions before they can be completed
The transactions are cryptographed and kept in an immutable digital ledger known as the blockchain, this makes it almost impossible to alter.	their transactions are recorded in databases and computers which have a very high chance of being compromised.
The omission of intermediaries in their transaction process gives them more room to be faster in the transaction process.	they are slower, this is because they employ intermediaries in the validation of their transactions.
Cryptocurrencies deals with the challenge where it becomes difficult for currencies to be used internationally for payments.	they are mostly only used in a certain country, for example, the Ghana cedi can only be spent in Ghana.
Cryptocurrencies are mostly in the digital form	conventional currencies on the other hand can be in both the physical and digital forms.
there is a limited supply of cryptocurrencies	conventional currencies have an unlimited supply
their values are determined by the supply and demand of the coin	Their values are determined by market regulations

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One of the greatest innovations of cryptocurrency which is also the basic building block of cryptocurrencies is Blockchain. They are digital ledgers, that are transparent, secure, and free from external control, which also means they cannot be compromised.

Since they were introduced, they have helped in solving some major financial problems. Double spending was a common problem that the world faced, with individual transaction authentication, cryptocurrency solved this problem.

They have also aided in doing away with intermediaries like banks and other financial institutions that slow the transaction process. It does this with the peer-to-peer system that it implements and the use of consensus mechanisms. This helped to significantly improve the speed of transactions and also made them convenient.

Cryptocurrencies also came in as an alternative to payments made for services and goods that operates without the influence and control of central authorities who use too many rules and regulations to restrict the freedom that the users of conventional currencies have.

With the innovation of cryptocurrencies, some people are able to live a good life due to the money they are making. Some people make money from crypto trading, investing, and mining. This has improved the lives of many individuals

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Cryptocurrencies have a lot of downsides that I want to talk about,
One of them is its Scalability issues. When compared to the conventional currencies, cryptocurrencies are running behind in the number of transactions it processes.

There are some issues with Cyber-security. Cryptocurrency transactions protect the identity of their users giving them some level of anonymity. This turned out to be very toxic as some malicious people take advantage of it to commit their crimes. There have been a lot of reported cases of criminal activities and cyber-security hacks and breaches. This has caused people to lose their fortunes, some losing their lives as a result.

Volatility: the price volatility of cryptocurrencies and their lack of root to a stable value has made them a very risky place to invest. Investors can lose their funds within minutes. Their prices are mostly manipulated by some greedy and fearful people who trade by emotions.

Cryptocurrencies are not that regulated; this gives an advantage to some criminals as they use them as a shield to hide behind and perform their fraudulent activities.

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Fortunately, the downsides mentioned above have their solutions, some of which have been implemented already.

With the issue of volatility, there has been an adoption of Central Bank Digital currencies which links the value of cryptocurrencies to the conventional currencies of a country or group of countries. This way cryptocurrency will become a bit more stable and reduce the fear of investing.

When it comes to scalability, cryptocurrencies are adopting various ways to improve it. one of them is the creation of a Lightning Network. With the lightning network, transactions are made between users off-chain. The transactions after being completed are recorded on-chain. This opens up space on-chain to process some more transactions by reducing the stockpile of unprocessed data on-chain. The speed of the network is now improved.

Another measure to help in the Scalability issue is Sharding. This is when data is shared among different operations to take some of the workloads off the main network and subsequently increase the speed of the transactions.

To add to the volatility issue, it would be best to set a bedrock for which the price of a cryptocurrency can fall to and not below. This would keep the investors from losing too much and still have something left after a strong bearish market.

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I am really confident about the bright future of cryptocurrency. We have seen for ourselves how cryptocurrencies like Bitcoin which were worth almost nothing now have so much value in the financial system of the world.

We can also see how the world is gradually shifting to the digital realm. This means a lot of prospective growth for cryptocurrencies. NFTs are growing, and innovations in cryptocurrency like Metaverse are being brought forth. Metaverse is a great breakthrough for the digital world with a lot of potentials which is great news for cryptocurrency. A new technology that has been told to be the decentralized internet of the future Web3 is also on its path to greatness, it would need a decentralized currency since it is decentralized and that shines bright on cryptocurrency.

There have been some predictions by cryptocurrency analysts who are showing some very promising numbers on the future of cryptocurrencies. They trust that the market cap of cryptocurrency will go beyond $5BN by the year 2030. This is completely attainable.

We can also see governments of some countries are adopting the idea of cryptocurrency. Some of them are using blockchain technology to make their own Stable coins. Some countries like El Salvador and the Central African Republic have accepted Bitcoin as a legal currency to be used in the country.
Some financial institutions are also adopting blockchain technology into their system. There are some big brands like Home Depot, Microsoft, AT&T, and Starbucks that are now accepting cryptocurrencies.

Cryptocurrency is here to stay, there might be some unfortunate results here and there but we have to keep our heads high as great falls are mostly followed by major growths. Cryptocurrencies are known to be very volatile so users should be very aware of the risk involved in investing and take a very careful look at crypto coins before investing in them.

I really believe in the future of cryptocurrency with all these stated facts, cryptocurrency is the future.

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This post was about the future of cryptocurrency so I explained in the first part what cryptocurrencies are, I said they are basically digital currencies that can only be used on the internet, they cannot be felt or touched. They are also called the money of the internet.

Then I did a comparison between cryptocurrencies and conventional currency by stating some similarities and differences between them. Some of them are that they are both mediums of exchange but cryptocurrencies are decentralized while the conventional currencies are centralized.

Despite all these good things about cryptocurrencies, they have some downsides. For instance, they have scalability issues along with cyber-security and volatility issues. However, there are some solutions to these downsides some of which are in effect, for instance, there is a lightning network and Sharding that are dealing with scalability. For volatility, there is the Central Bank Digital Currencies that aims to stabilize some cryptocurrencies.

I strongly believe in cryptocurrency's future and recommend that readers carefully invest for the long term as they will surely reap rewards in the future.

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I invite @phlexygee @rad-austine @simonnwigwe and @pandev to partake in this contest.