Good morning fellow students and our dear professor, it's nice having everyone of you here in this community. I say a big thank you to our curators as well, God bless you guys @steemcurator01 and @steemcurator02.
Sir @levycore, here is my submission for this week assignment
No 1.
What is the fundamental difference between Cryptocurrency and the conventional financial system?
A cryptocurrency is a digital asset this is used in the process of online exchange for goods and services. Cryptocurrencies uses online ledger (blockchain) in storing transactional records.
There are more than five thousand cryptocurrencies and all these currencies strongly secure their transactional records through the use of cryptograph (codes)
Conventional financial system is a financing system which are always offered by banks and other financial institutions. They deals with paper money and other currencies with government signatures
All activities that are being carried out in this type of system are always Centralized, i.e they are always under authorities. Most of their actions must be approved by the government and other controlling authorities.
Their transactional records are either saved on book or sheet, these records are not coded
| S/N | FUNDAMENTAL DIFFERENCES | CRYPTOCURRENCY | CONVENTIONAL FINANCIAL SYSTEM |
|---|---|---|---|
| 1. | ACCOUNT CONTROL | Users have full authority over their own accounts | Users have limited control over their accounts |
| 2. | ISSUER | Cryptocurrencies are not issued by central authority(ies) i.e they are decentralized | They are fully issued by central authorities i.e they are centralized |
| 3. | REQUIRED TIME AND CHARGES ON TRANSACTIONS | Fast time on transactions and cheap transaction charges | Transaction are slow and there's too much charges and interest on transactions |
| 4. | ENERGY CONSUMPTION DURING TRANSACTION | No energy is required for making payments | You will have to face a lot of stress before you can save your money or make any payments. You may even face pannel getting loan |
| 5. | TRANSPARENCY | Transaction can not be question because of the transparency | Transactions are questionable, at times you will have to contact the bank customer care to know why some operations are carried out on your account |
| 6. | RECORD KEEPING METHOD | Transactional records are saved on blockchain | Transactional records are either saved on paper or sheet |
No 2.
Why is a Decentralized system needed?
Decentralized system is needed in many sectors, below is the list of some sectors and what they can do with decentralized system
1. Banking Sector
- Cryptocurrencies are free of national monetary policies.
- Users of decentralized system are safe from exuberant charges, bank failures, collapses and bank policies
- Payments in a decentralized system are borderless and the payment charges are cheap
- Everyone can use a decentralized system, the only requirement is the ability to open and perform transactions on your wallets.
3. Health sector
Patient hospital bills can be paid through a decentralized system. The receiver only need to choose the required cryptocurrencies they accept as a means of payment
Company can buy and sell their pharmaceutical products to hospital and patient using a decentralized system. The product seller in this case will be the one to choose the accepted currencies for their goods and services.
No 3.
What affects the value of cryptocurrencies?
There are so many factors that determines the value of a cryptocurrency, some of them are listed below;
- Government Policy
- Nodes Count
- Increase In Demand
- Fiat Price
- Mass Adoption
The value of cryptocurrency can be determined by the number of countries that allow the uses of cryptocurrency. If there's increase in the number of country that allows it's citizen to use cryptocurrency, there will be increase in the value of th approved cryptocurrency. So also if there is increase in the number of country that forbid/ban cryptocurrency, the value of cryptocurrency will decrease
This refer to the number of active members a network have. Increase in active member of a cryptocurrency network will bring increase in the value of the currency. Take steemit as an example, there is decrease in the price of Steem and SBD some years ago when there is decrease in the number of active users, now steemit is having so many active users and the Steem and SBD price increases as well.
Whenever there is a increase in demand for currencies that are has a lower market supply, there will also be increase in the value and when there is decrease in demand there will also be decrease in value of the currencies.
Fiat as it mean is “an inconvertible paper money made legal tender by a government decree” e.g NGN, USD etc
Increase in Fiat Price lead to decrease in cryptocurrency price and decrease in Fiat Price rate leads to increase in cryptocurrency value.
E.g if 1 USD increases to 470 NGN and 1 TRX is sold at 47 NGN. We are expected to get 10 TRX from our NGN. The value of TRX in this aspect is decreased.
If 1 USD now decreases to 376 NGN and 1 TRX is sold at 47 NGN, the expected TRX from the NGN will be 8 TRX. The value of TRX here has increased
Note: the higher the number of cryptocurrency you can buy with your Fiat the lower the value of the cryptocurrency
Let consider Bitcoin in this aspect, one of the reasons why Bitcoin value keep increasing is that many organizations now accept BTC as one of the payment method for good and services.
In short, the value of crypto currency depends on how companies and other organizations uses them in transaction.
No 4.
Why can't everyone be a miner?
There are so many reasons why everyone can never be miner, I will list some important factors to consider before going into mining cryptocurrencies and with those points we are going to know the major reason why everyone can't be a miner;
1. Availablility of Mining gadgets:
Before anyone will start mining, it's important to have a computer. The computer must have some specific capacity to be able to mine cryptocurrencies, not just a computer can mine. A standard computer is required (Competitive mining computers).
Also there are some software that will be installed on the computer, these software are expensive and are needed to be installed on specific type of computer, if not the computer will crash in less than a week.
2. Electricity Supply: Mining cryptocurrencies is not a “two to three” hours job. A miner must make sure that he or she has a standby power source to prevent the computer from switching off during mining.
3. Setting Up Digital Wallets: A miner is required to have a digital wallet where they save their mined currencies.
4. Country Policy: It's important to know how your country treat cryptocurrencies before entering mining, there are some countries that doesn't encourage their citizen to trade crypto talkless of them allowing their citizen to mine.
Considering the above listed factors, it's not everyone that will be able to cope in every aspect.
There are some regions where there is no standby electricity supply and many people cannot afford the cost of creating their own power source, so it will be difficult for those set of people to start mining.
Lack of mining technique is another reason why everyone can not mine, to be a successful miner you must be an expert with a full understanding of what mining entails.
Again, it's required of a miner to have a competitive mining computers (rigs), mining software and a latest hardware for a successful mining activities. All these gadget are not available in some countries and the cost of importation and activation of these instrument is high.
Also, many people believe mining is hard to do and stressful, this is actually true through. At times you will not sleep, to eat at time may be risky.
No 5.
Why can cryptocurrency transactions be called more transparent?
Steemit is the first decent social media in the world and steemit has their specific wallet. Inside the wallet there are two types of currencies. We have Steem and Steemit dollars
Now, talking about what transparency mean in the world of cryptocurrency; Transparency is the ability to reveal all transactional activities carried out by a crypto wallet owner to everybody.
Let us take steemit wallet as an example, many people can see all transactions carried out in a wallet and the time of the operation. So we can simply say steemit has a transparent wallet that everyone can see.
Below are the images that shows how transparent a cryptocurrency should be;
this is professor @levycore wallet, I hope we can all see his transaction even without having his private keys</center
this transaction details is for my brother @damzxyno
and this my personal account transaction breakdown @timileyin988
The above images explain what crypto currency transparency means, all cryptocurrency wallet should have a transparent wallet system
No 6.
Explain how the development of cryptocurrency in your country?
@timileyin988 is a Yoruba Boy from Nigeria. Nigeria is one of the giants of Africa. So I will be sharing the development of cryptocurrency in my country (Nigeria);
Nigerians takes the second position after the United States citizen in the world of cryptocurrency, this simply shows how enlighten we are regarding crypto but the challenges we are facing is ban from the federal government.
Cryptocurrency is not yet approved by the federal government of Nigeria probably because it is not created by the central bank of Nigeria, yet Nigerian are leading in the world of cryptocurrency.
The central bank of Nigeria understand the fact that taking part in cryptocurrencies can eliminate citizen need for banks and other financial institutions in managing exchanges of currency and asset, so they are trying their possible best to stop citizen from participating.
Not too long ago, there was an announcement by the central bank of Nigeria that they can cryptocurrency trading for Nigerians. CBN have frozen many accounts belonging to people that had already linked their conventional bank account to their cryptocurrency for easy withdrawal.
Few days after the announcement, some of the Sanators in the country go against the ban of cryptocurrency. They tried to convince their fellow senators by sharing more light about the benefits of cryptocurrency.
@levycore
@steemcurator01
@steemcurator02
@steemitblog
Unless otherwise stated, all the images are my original works.
Lol... You go dey check my account wallet. Blockchain no get secret o 😂
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Yeah bro, that's what we called transparency whenever we talk about cryptocurrency. Your bank will never give the opportunity to check things like this.
And that's one of the reasons why corruption keep increasing in our dear land, let say we have chance to see our political leader wallet balance there will be reduced corruption rate as most of them will be fearing questions from citizen on there account statements
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Hi @timileyin988 , Thanks for submitting your homework
Feedback: You have completed every point and you have understood the basics of cryptocurrency
Rating: 6
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