Crypto Academy Week 14 , Homework task for @levycore

in hive-108451 •  last year  (edited)

Hello everyone welcome to my post which is a home work given by our professor @levycore in this week lecture in the cryptoacademy community which you can visit here any way it's time to answer the homework question.

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

The fundamental difference between cryptocurrency and the conventional financial system is very important and needed to be pointed out at any given time, Cryptocurrency or digital money as we know are assets that can be seen but not touched or felt but holds value and indeed performs it's it's function as a legal means of exchange though it is not accepted all over the world it is only accepted in developed countries While the Conventional Financial system unlike crypto has a physical touch which can be moved from a place to another by man effort or electronically and are accepted all over the world as a financial asset.

Cryptocurrency can operate fully in handling transactions without any activity from a middle man while Conventional Financial system or traditional financial system can not operate fully without the activity of intermediaries or middle men which is time consuming and saddled with unnecessary bureaucracies.

In the cryptocurrency community it is 99% decentralized platforms that does not require any form of central command to perform efficiently and effectively while in a conventional financial system every operation carried out must pass through s central command.

It is fact that cryptocurrency are immune to inflation, that is to say the activity of inflation in the market does not affect any crypto asset value unlike what you see in any conventional financial system asset.

All the activities carried out in conventional financial system cost a lot in fee charges while it's opposite in cryptocurrency.

2. Why is a decentralized system needed?

There are many facts why decentralized system is needed which may not be entirely different from centralized system but surely an upgrade.

I). Absence of central unit of control: A decentralized platform doesn't need any central control of any sort to carry out transactions or anything.

II). Reduced Hack Activities: In decentralized systems hacking activities hardly happen unless those ones that happens to loss of keys by from users or centralized exchanges where the assets are kept. It is a more safer platform to assure investors of their 100% of assets invested.

III). Scalability and Interoperability: It doesn't just know how to handle large amount of transaction very well but also its capacity to interchange data with other blockchains systems with high level of guaranteeing such information are not ruined or changed before they are executed during the method.

Iv). Transparency: Transparency is what all the government and also institutions want to see in any thing before they put money in it and decentralized systems possess that characteristic.

3). What affects the value of cryptocurrencies?

There are many factors that affect the price of cryptocurrencies and i am going to list and explain.

I). Demand and Supply: This is what you see in every asset, when demand of the asset gets higher and the supply of the asset gets lower the price of that asset grow higher.

II). Hacks and Asset loss: The jacking of large amount of cryptocurrency can lead to price of the particular asset going down.

III). Bad News or Bad reviews from high holders of the coin can lead to the price of cryptocurrency going down in value.

4). Why can't everyone be a miner?

First of all the process of mining brings unused new tokens into circulation but it is the important component of maintaining and the developing of the blockchain ledger It is performed using very sophisticated computers that solve extremely complex computational math problems that is the cost of this equipments are very expensive and i am going to explain why.

I). The expensiveness of assembling ASICs therefore not everyone can afford them.

II). High cost of energy use because all this equipments use a lot of energy in operation.

III). It is not universally accepted just like in nigeria where cryptocurrency is banned but crypto currency lovers are still doing their business with the P2P method.

5). Why can cryptocurrency transactions be called more transparent?

A lot of Cryptocurrency transaction are carried out in a decentralized platform which is a blockchain system and transactions carried out in decentralized platform are stored in nodes and these nodes are made available to any connected systems to the blockchain network. Let us look at the following reason seen here which makes it more transparent;

  • processed transaction data hashed in a block are stored in a blockchain
  • Information that has been stored cannot be deleted or changed
  • information and data are in the public for any one to view

6. Explain how cryptocurrency has developed in your country?

I am currently staying in nigeria which was ranked as one of country with high cryptocurrency usage mainly from youths who are making a living in Nigeria which has the highest unemployed youths.

This will seem as a good idea to lift a lot of people out of poverty and also a good image for the current elected government but it turned out this government is more focused on creating more poverty in the land by the CBN ( Central Bank of Nigeria ) Banning Cryptocurrency by directing all the banks to close all the account of those people involved in cryptocurrency because over $500m worth of volume are seen to have been transacted in the cryptocurrencies token for the period under review.

I think banks are just jealous because people rather hold crypto than store cash in banks which stays there and you gain nothing in return so people choose to put their money in cryptocurrency and see the token go up in value which then increase their money.

The Ban in Nigeria has not affected crypto lovers because of P2P people can still buy and sell crypto, the only problem is that you pay more for crypto and you sell less for crypto now because it is not market price that the P2P dealers are using but their own price.

Conclusion
I think Decentralization is the future it just need acceptance and upgrades anyway thanks for reading i hope i explained it very well.

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Hi @okoyejoshua, Thanks for submitting your homework

Feedback: You have completed every point but, You are still lacking in explaining each point ,next please do more research for your post and please put image source if the image is not your own image.

Rating: 4,5

You can't review anything because i know i did all the necessary research that was needed.