I have read your lecture, and your argument was very good, then I will present my homework to share with you all.
- 1. What is the fundamental difference between Cryptocurrency and the conventional financial system?
Cryptocurrencies and the conventional financial system have great similarities but they have certainly taken a different path to supply the needs or priorities of each person. There are great elements to differentiate one system from the other that will be presented below.
* Decentralization and Centralization.
Cryptocurrencies comprise one of the most decentralized systems that exist since they are not run by financial entities that have control of their actions, since they are not registered with an entity that controls their free circulation through the blockchain blockchain. .
Conventional financial entities are completely centralized, this means that there is a leader behind all decisions and the administrative sector is the one who makes people follow those rules to the letter, this allows to take some control of everything that is within the organization. The user is deprived of financial freedom.
* Speed of transactions
This point is very important, transactions in the centralized system have to be carried out by means of the entity's rules, either by sharing a deposit or withdrawal pattern and if the user leaves that regulation, they simply cannot carry out the same. transfer of their own money or deposit them, many times it has limitations on the speed of transfer from one entity to another, or from one account to another, all this happens since the system is centralized, but when we use cryptocurrencies there are no protocols that limit the use of your money, since both deposits and transfers or internal changes of our cryptocurrencies are made on the blockchain network, all freely without protocols and transfers are totally fast and safe, no matter the amount or the place where you are, only with an internet network can you use your cryptocurrencies.
* Financial Circulation
The biggest drawback of centralized systems is that for everything, it is a problem, especially when you are going to travel abroad and you need to have another type of currency and you are going to change the currencies of your country for others, this problem also exists in our country when we decide to make a transfer from one centralized entity to another since the transfer time is long, sometimes days, in addition to the fiat money that does not allow you to withdraw the amount you want but there are withdrawal limits. And for everything it is a follow-up. In cryptocurrencies they are totally free to carry out any type of operation, of the amount you want, and an important fact is that you can travel around the world without problem of missing the fiat money of the destination country, since with cryptocurrencies there is a market p2p that allows you to exchange cryptocurrencies for fiat money.
Financial entities often have full control of your assets, they have constant monitoring of your account and no one can see the transfers you made or the account movements except you and the entity's operators, since all operations They are registered in your account and you only have access to that information, the entity and you. In cryptocurrencies there is no entity but the record of all transfers is openly free to see on the blockchain network, any user can see the amount of transfer and where it went, but not the personal information of the sender. For this reason it is transparent.
Centralized financial entities have a very good security method since their priority is the security they provide to protect your funds, if something happens, the entity responds for something bad, and since the entire system is centralized, personal data of both individuals who carried out the transaction, it is extremely safe, to a certain extent since they can hack your credit card or bank systems because they are centralized, in cryptocurrencies there are no such inconveniences, since security comes first and We completely forget about hacks, but there is the facility of losing a lot of money if you are not attentive to the sending address of a transaction, if this happens, you would lose money, because the network is free without controlling entities and there is no where to claim.
- 2. Why is a decentralized system needed?
A decentralized system would give many positive benefits for a large part of investors, since many want to have the free use of their money, and the free circulation of it, decentralized systems would end the vague centralized banking systems that have total control of your money. assets, many times centralized systems help to combat money laundering, but in decentralized systems there are no such restrictions, it would help to combat currency inflation, and the fraudulent exchange rate that exists in many countries, since with the p2p system would have free monetary circulation of cryptocurrencies to fiat currencies from all over the world.
Decentralized systems are very good because there are no entities that control them, so they will never block your account, or your money, through this many people will be able to carry out transactions at the time they want and at the time they want.
- 3. What affects the value of cryptocurrencies?
The impact of the value of a cryptocurrency many times depends on the fear of the form that exists between buyers and sellers in trading, large whales in the market carry out strategies that through social networks carry out a strategy in advertisements that psychologically change the perspective of many Investors, forcing them to buy or sell quickly out of fear, the value of a cryptocurrency also depends on the freedom of use of each country, if it generates confidence in the future to invest in it, also through its project it generates a lot of confidence to long-term for investors, it also depends on the amount of tokens available in the world, and especially if it is possible to generate tokens through mining, today the price of a cryptocurrency can also change if it is chosen to enter new exchanges, and the freedom of exchange that it possesses.
- 4. Why can't everyone be a miner?
Everyone cannot be miners because we need speed to solve equations and numerology in cycles and patterns to solve blockchains, for this, the engineers created algorithms that work continuously and through hardware, these algorithms are implemented in hardware that does the job. easier and faster, the big problem is that many of these devices are like powerful minicomputers, these devices are often very expensive since they have state-of-the-art components that allow generating blockchains very quickly, in addition to the fact that mining depends a lot of the legality of each country, not in all countries it is legal to mine cryptocurrencies due to the high cost of electricity, it is also super important to have a suitable area for such expensive equipment, its maintenance is expensive and difficult to carry out, but not everything is bad, there are methods that are somewhat easier with hard drives that can be used for many entrepreneurs, also ex There are some centralized entities that allow the use of their machinery by contracts, just for investors to mine cryptocurrencies from long distances at comfortable prices.
- 5. Why can cryptocurrency transactions be called more transparent?
All cryptocurrency transactions are usually transparent for the reason that their transactions are registered in the blockchain network in view of everyone, when making a transfer between two people you only need a wallet sending address without the need to personal data, since the system is decentralized and does not need documentation or a regulatory methodology, in addition to providing a number of easily exchanges for other cryptocurrencies, and even fiat currencies from any country in the world, in addition to the fact that the blockchain is working 24 hours a day and through this you can make any type of transfers immediately, no matter the amount and the most important thing is that there is no centralized regulatory entity that controls cryptocurrencies or their operations because it is anchored to the blockchain network.
- 6. Explain how the development of cryptocurrency in your country?
The development of cryptocurrencies in Venezuela is increasing as many are looking for a solution to the crisis that is currently being experienced in the country, and the best option is cryptocurrency investment, there is free circulation of cryptocurrencies and anywhere they can be accepted, many people are dedicated to day-to-day work and do not have knowledge about cryptocurrencies and about the information technology necessary for its use, that is why only a small part of the population knows how to handle cryptocurrencies.
I have seen that there are many people who work with cryptocurrencies and so that inflation does not consume them, they work through the p2p exchange system, to exchange cryptocurrencies for fiat currency from Venezuela, through financial transfers.
With the use of cryptocurrency mining activity, if it is prohibited, since energy costs are enormous and the government has placed regulatory measures on energy, for this reason whoever is caught in an illegal mining activity will have legal problems.
The government of the Bolivarian Republic of Venezuela created in 2018 a cryptocurrency with the name of Petro, which would serve for the free trade of oil since the United States would have seized oil shipments and blocked the accounts of financial entities in the United States for acts of corruption, for this reason Venezuela chose to create the petro token to carry out operations with cryptocurrency. This cryptocurrency has the value of $ 55 or the equivalent to the value of oil, and is purchased through the fiat currency of any country and with cryptocurrencies.
With this enormous research I can say that the use of cryptocurrencies in the world is advancing very fast and through this, I think that our future will depend on digital tokens and cryptocurrencies, the decentralized system is the favorite of all people because buying a large one from you Liquids, security, and privacy that everyone wants to have, especially in the freedom of being able to use our money when we want it.