Hello Everyone !!
Hope all are well. Today's homework topic is to learn about cryptocurrency. Cryptocurrency is the main keyword for the crypto academy. So there is no doubt that we are going to write important homework in the week. So let's begin.
What is the fundamental difference between Cryptocurrency and the conventional financial system?
Cryptocurrency and conventional financial systems are both popular all over the world. Time is passing as well as the test of people changing too. Before the twenty-one-century internet was not popular like now. I think we are now living modern era. The whole system is being digitalized rapidly all over the world. Cryptocurrency is one kind of digital currency on the other hand conventional financial system very old system. There is a lot of differences between cryptocurrency and conventional financial systems. The differences are given below.
Cryptocurrency carries a decentralized system but conventional financial system carries a centralized system. As a result, no one can dominate a decentralized system but in a centralized system, authority can dominate as their wish. I think this is a big difference.
Decentralized is highly secure than centralized. Because Hackers can hack centralized (bank account) systems easily but never can be hacked decentralized (cryptocurrency) systems.
The conventional financial system has limitations to transfer balance but there is no limit to transfer.
In a conventional financial system, the transfer fee is high than in cryptocurrency.
Cryptocurrency is one kind of digital currency but conventional finance is not digital.
One of the basic differences is that cryptocurrency is highly transparent but in the conventional financial system has lacks transparency.
why is a decentralized system needed?
The decentralized system is being very popular day by day. Because a decentralized system has a lot of advantages. No one on earth wants to be ruled by others. Everyone tries to work independently. Decentralized is the best place where one can do anything freely. For example, if we want to highly secure transactions where no one can interfere. In this scenario, my suggestion is to go in the decentralized system. There is no need for third party to transection in the decentralized system. On the other hand, every centralized transaction needs a third party to make a transaction which increases the transaction fee. The transaction fee of the decentralized system is very low I think this is a great benefit for all users.
There is another best opportunity in a decentralized system is time. The centralized system provides their rule, as their rule, you have to make transactions. I mean they provide time limits otherwise you can't transact but the decentralized system is reverse where the user can transact any time from anywhere.
Now I want to say about transparency. Decentralized is more transparent than centralized. That is why people are accepting it very easily.
From the benefits mentioned above, it is clear that the world needs a decentralized system for the best transaction for the present era.
What affects the value of cryptocurrencies?
There are many things that affect the value of cryptocurrency. Now I will discuss some notable things.
Acceptability
I think this is the most important thing that can affect the value of cryptocurrencies. The more people accept cryptocurrency, the more its value will be affected. It is happening because if we look at the current situation and the previous situation of the cryptocurrency market we will find that the value of cryptocurrencies increasing for its popularity.
Loyalty
Loyalty is the most valuable thing in the world. The thing that has the most loyalty is the most acceptable factors to people. The cryptocurrency system is like getting loyalty to people. That is why attracting more people for its loyalty as well as the value of cryptocurrency is increasing.
Eagerness
The eagerness is increasing rapidly. As its popularity has grown, many companies are investing here. As a result, it is getting more acceptance from the people.
Entrepreneur
When an entrepreneur involves more and more the value will change rapidly. For example, if some interpreter invests in cryptocurrency mining. The value will change must.
Why can't everyone be a miner?
Every work has its own process. In this case, mining also has its own process. Before mining cryptocurrency, we have to know what type of instruments need as well as how it works to mine cryptocurrency. After that, it will be cleared that who will be able to mine cryptocurrency.
I will try to explain the answer to focus on Bitcoin.
Firstly, if any person wants to mine Bitcoin then he has to go through a process. Bitcoin mining is a complex process, mining requires a computer capable of complex math computation.
A minor needs to know that about necessary devices which will be used in mining according to proof of work (PoW) consensus algorithm.
According to the Proof of Stake (PoS) consensus algorithm, a miner has to invest his fund in the blockchain network. Everyone is not able to make the funds required.
If a person can complete the things I have mentioned then he can be a miner. Otherwise, the people can't be minor that is why we can say that everyone can't be a miner.
Why can cryptocurrency transactions be called more transparent?
The transaction of cryptocurrency is highly transparent. The conventional financial system is controlling by a third party. If the users want to transact funds with their clients. Evidence of this transaction is limited to only two persons. It is impossible for any common people to know whether it was done or not. Moreover, it is difficult to find any kind of clear evidence about the validity of the fund. That's why money launderers smuggle money here, but they have to face a lot of trouble to get the news.
Cryptocurrency transaction is totally different from the conventional financial system. For example, I will discuss the transaction of steemit because steemit is a crypto-related social media. The transection of steemit is very easy, here if a person transects anything, the proof can be seen in that person's account. It can be taken out by any ordinary person, from any place. No one can hide it. This is why cryptocurrency transaction is called the most transparent.
Explain how the development of cryptocurrency in your country?
I am a citizen of Bangladesh. It is very unfortunate that cryptocurrency transactions are completely banned in our country. The government of our country has not taken any step in this regard. However, the Member of Parliament of Bangladesh has argued in favor of taking timely steps in this regard. Hopefully, we will get good news about this very soon.
And I also hope that if cryptocurrency is accepted in Bangladesh, then there will be a groundbreaking revolution in the financial system of this country.
Conclusion
I have learned a lot by researching today's lesson. I think the given lesson illustrates the pros and cons of cryptocurrency. Especially what is cryptocurrency, how to work, use, mining, advantages, and disadvantages and homework topics were very important to know us.
Thanks for reading my post.
Cc
@levycore
@alphafx Sir, please verify my homework.
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