Crypto Academy Week 14 - Homework Post for @levycore

Hello everybody, Hope you all are fine and in good health!

My this post is a Homework Task assigned by professor @levycore

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

The main difference between Crypto currency and conventional currency is the involvement of the 3rd party as a source of someone who takes part in the transaction from the owner to the recipient. The 3rd party may be any Bank or ATM when we consider doing transactions in the conventional currency. In contrast, Crypto currency gives us this advantage of direct peer-to peer marketing without the involvement of any 3rd party.

Furthermore for transaction through the conventional currency, we need to comply with the Bank we use and the ATM we are using, which can be a disadvantage using the traditional money. Whereas, The transactions made through Cryptocurrency are safe and secure through the blockchain platform.

While there are chances of theft and scams through conventional currency.

Furthermore there is very less Transactional fee for international transactions through Crypto as compared with the conventional currency.

Cryptocurrency	Conventional Currency
No involvement of the 3rd part it is a direct contact between the peers	The involvement of the 3rd party like the bank or ATM in the transaction.
No compliance with bank or any other 3rd party as it has no restrictions	There is compliance with the 3rd party like bank and the ATM to their policies
It has a more secure transaction and the chances of robbery and theft are bare minimum	As compared to the crypto currency the chances of theft and scams are more
High Risk Investment	Low risk
Mostly Decentralized as you are your owner of your wallets and No one actually controls the market	Centralized and Governments control the prices.

Why is there a need for a decentralized system

A decentralized system helps the parties set up their organization with having no restrictions of the policies to follow or any other imposed restrictions; hence this is an added advantage of the decentralized system where you can set up your own business without providing any share of profits to the developers of websites or Apps.

Further, a more Decentralized system opens up the way for many people to enhance their skills and ideas and put them into effect without the fear of any restriction being imposed by the organization or the website. In addition to that, they are fearless for the fact that their account will be blocked, and their hard work would go in vain as the decentralized system cannot block your IDs or accounts as there are no restrictions.

What affects the Value of Cryptocurrency 

The value of a cryptocurrency depends on various factors. Still, the most common factor is the Supplier and demand relationship, which is evident in all businesses that are out in this world, a relationship that holds in between these two is that when the demand increase, the supply also increases, so the investment into the product also increases similarly the same formula applies to the Cryptocurrency present in the crypto market When a particular currency is hyped and accepted by different companies as their mode of transaction people start to invest in the tokens of that Cryptocurrency as they know that in future its prices will rise and that is what happens when investments begin to seep in. The demand for that specific Cryptocurrency increases the prices go up significantly. They are one of the primary reasons why the prices of new cryptocurrencies go up due to their increase in demands.

Moreover, there are sentimental and emotional factors associated with cryptocurrencies related to many people who only buy particular Cryptocurrency, causing their rate to rise significantly.

Why Can't everyone be a Miner?

Mining is a tough job that requires excellent expertise, and every ordinary person cannot be a miner. There are top companies that help Mine the coins, and after the coin has been mined, they take shares from the Cryptocurrency transactions.

Furthermore, Mining cannot be done on ordinary Laptops and Computers and requires Computers with specific requirements and Specifications that enable someone to be a miner in today's world. With that comes the fact that not everyone cannot afford those High specification Computers.

As we all know computers need electricity to function, In our modern world we live in a country where the electricity supply is already short and it is estimated that a total of 13.81 Gigabytes of energy is required annually for the proper functioning of the computer hence ensuring that you can also be a Miner.

Why the Cryptocurrency Transaction is called More Transparent than Others?

This is the added advantage of Cryptocurrency that the Transactions are very safe and identity theft is nearly impossible. The Cryptocurrency transaction system is just unbreakable up to now, but you never know when a time comes that the system could be hacked.

The Blockchain system has a network of Distributed Miners all over the world, which grant permission for the Transactions to occur. The designs are placed worldwide, and it is impossible to trace all of them and then hack all of them; hence Blockchain being decentralized provides complete security to the transactions made in Cryptocurrency.

To Summarize, the talk and simply the copies of the Block chain are kept on an extensive and widely distributed network of nodes, so there's no one weak point to attack, and it's hard for anyone to build up enough computing power to subvert the network.

Development of Cryptocurrency in Pakistan 

It is a negative story, but this is what it is. Cryptocurrency is not Legalized to use in Pakistan, whether it then Bitcoin, LiteCoin, or any other form of Cryptocurrency, but there are actions taken throughout the country by various influencers such as Waqar Zaka ( he has made a secret group on Facebook where he provides his expertise to a group of his followers regarding cryptocurrency) to help legalize the use of Cryptocurrency.

There was news that circulated in 2020 that the assembly of KPK has passed the act which said to legalize Cryptocurrency and Waqar Zaka also tweeted that he will serve Pakistan in the field of Crypto without charging a single penny from the government. Still, there was nothing heard from the National Assembly, and the work is going on to make crypto legal in Pakistan.

Conclusion

In the upcoming times, Conventional Currency will start to disappear from this world as everything will be done in Crypto. However, there are still discrepancies due to many countries not accepting Crypto.

Still, in the future, due to its safety in transactions, it will be something that you should start to invest now for you to have a good return in future, but do remember that it falls in the High-risk category and to invest have a piece of good knowledge about the currency so it can be fruitful rather than a disaster.