Hello Steemians, today is another episode in the Crypto Academy community. Before submitting the assignment, I would like to thank @levycore and the Crypto Academy community and all the professors for making this educational meeting possible. This topic is interesting and important (Cryptocurrency).
A cryptographic money is a type of computerized resource dependent on an organization that is circulated across an enormous number of PCs. This decentralized plan licenses them to exist outside the control of governments and central trained professionals. In other words, Cryptocurrencies are decentralized networks based on blockchain technology - a distributed ledger that is reinforced by a different computer network.
The fundamental differences between cryptocurrency and conventional financial currency are as follows;
conventional/traditional currency is a centralized system, while cryptocurrency (Bitcoin, Ethereum, e.t.c) on the other hand, are decentralized systems. As a result, there are no central authority/third parties to supervise the rules and regulations of cryptocurrency transactions, but traditional currencies unlike cryptocurrencies, are subject to strict supervision.
With conventional financial currency functioning for five days a week (banks) and due to transaction restriction, there can be an endangerment thus; money can be frozen at any point in time. There is no limit in the number of currencies, stuff printed, and hence when there is inadequate currency, it will stupefy the buyers and sellers, resulting in inflation. But the maximum limit a trader or an investor can mine with Bitcoin (a cryptocurrency) is 21 million, leaving both the buyers and sellers to mine accordingly; thereby, there is no inflation in a bitcoin Cryptocurrency system.
3. Reduced cost and instantaneous transaction.
Crypto transactions are scrutinizingly instantaneous, it allows investors or people to transfer to their family and friends anyplace/country within the world in real-time at a single click of a button without any delay. Suppose you wish to remodel BTC or any other cryptocurrency to a friend sitting anywhere in the world, the dealings are carried out instantly without any third-party association. Once debited from your account, they get attributable to your friend's crypto price within seconds. On the contrary, traditional/conventional transactions take hours to execute in a typical monetary system. Moreover, the transaction fee in conventional financial systems are higher as compared to cryptocurrencies.
4. Transparency is one of the characteristics that distinguish cryptocurrency from conventional financial currency. With blockchain decentralized network, transaction history can be accessed by everyone regardless. People/investors can see all transactions without any authorization from central authorities. Unlike, the traditional/conventional financial system, you can only view your transactions, but not others(it sometimes takes hours to complete the process).
5. Hacker find it very easy to get their hands on investors personal information and withdraw money from their accounts in conventional financial systems. Cryptocurency decentralized systems on the other hand is otherwise due to the multiple verification protocols it follows before saving users information.
Decentralization system are needed because of the following reasons
1. Reduces weaknesses
Decentralization can reduce weaknesses in systems where trust among certain traders/participants is too high. These vulnerabilities may cause system failures, including failure to deliver promised services or inefficient services due to insufficient resources, intermittent interruptions, and other reasons.
2. Decentralization systems help to optimize resource allocation so that promised services can be delivered with better performance and consistency, and reduce the possibility of catastrophic outages.
3. Improve data consistency.
Companies/traders often exchange data with partners. In turn, this data is usually converted and stored in the data store and only floats to the surface only when it needs to be transferred. The data in this situation can be missing or can incorrectly be documented. Using decentralized data systems, each investor has real-time access to a general view of the data.
4. Provide an unreliable environment.
In a decentralized blockchain network, no one needs to know or trust anyone (investors or traders). Every individual from the organization has a duplicate of similar information as a conveyed record. In any case, if the membership registration is changed or damaged, most network members will reject the membership registration.
1. The power of the media.
Various reports show that the media has the best influence on the price/cost of cryptocurrencies. Due to the increasing attention of investors/traders, the general public has a better understanding of cryptocurrencies. Whenever cryptocurrency investors find new knowledge/ideas in the media, they will immediately notify their friends. Due to the power/force of social media, the news will spread like wildfire, and the price of the cryptocurrency will be affected as a result. Positive media reports on cryptocurrencies often lead to price increases, while counterproductive media reports on cryptocurrencies are more negative.
Taking Bitcoin, for instance, there is no doubt that it is the most well-known and accepted cryptocurrency in the world, but although Bitcoin is still the most valuable, there are a lot of cryptocurrencies (such as Tether (USDT) and Ethereum (ETH)) competes with our considerations. In terms of market value/price, from March 2021, altcoins such as Ethereum (ETH), Tether (USDT), Binance Coin (BNB), Cardano (ADA), and Polkadot (DOT) have begun to become major competitors. In this rapidly changing situation, this may affect the price of the currency.
3. Demand and supply
The number of cryptocurrencies traded on exchanges accounts for only a small part of the total circulation. Since most cryptocurrencies (Bitcoins) are kept as savings, they cannot always be purchased/bought. User/investor's acceptance of a cryptocurrency asset is one aspect that may affect its price. Coins raise prices, while low demand for coins reduces their value. Rising demand and decreasing supply are pushing up the price of Bitcoin. Many people, companies, and investors have begun to use crypto assets as a tool for online transactions.
Why can't everyone be a miner?
imagine a number is being composed on a piece of paper in a room loaded with individuals attempting to figure out the right number, whoever says the right number for all to hear first gets the award. Everybody has an equivalent possibility of getting the number right on their next surmise. In any case, contingent upon how quickly they can say, so anyone can hear the numbers, their general odds of dominating the match would increase. for instance, somebody who can rapidly say 145465789, 4876545, 34875467893 inside 5 seconds will actually want to attempt a greater number of mixes and will have preferred possibilities over somebody like me who requires 5 seconds to say 236498.
Suppose we permit individuals to get companions and structure gatherings. The gathering that is the biggest and quickest at saying the numbers will have the best odds of speculating the correct number. In the event that you stroll into a particular game as an individual, the facts demonstrate that your next conjecture may be the fortunate one and win you the award. Notwithstanding, your odds of really winning the prize will be low. When you say one number, one of the different gatherings will have attempted 1 million unique numbers.
In simple terms, not anyone can be a miner because, Mining is done by powerful computers, which can solve complex mathematical problems. These problems are so complex that they cannot be solved manually, and they are complex enough to withstand even incredibly powerful computers.
Cryptocurrencies can be called more transparent because, Digital currency exchanges are done on the blockchain network, which is a decentralized public record. As the name infers, a blockchain is a square unit of data stockpiling. After confirmation, every exchange will be allotted in every hub of the whole framework for autonomous enrollment. All blockchain members can check these exchanges. Moreover, it is preposterous to expect to alter or erase a booked exchange. Hence, these traits make cryptographic money more straightforward.
The Bank of Ghana has noticed the latest developments in the use, storage, and transactions of virtual or digital currencies (also known as cryptocurrencies) (such as Bitcoin, Ethereum, and other cryptocurrencies in Ghana). The Bank of Ghana is as of now contributing critical assets to additionally improve the installment and settlement framework, including the computerized type of cash (cryptocurrency), and execute network safety strategies to guarantee the security of electronic and online monetary exchanges.
Despite the initial problems at this stage, the decentralized platform is the future of the financial system. It has more awareness and better ways to accept its use, but given its limitations, it must be clearly explained and implemented.
Thank you very much for reading through my post.