Steemit Crypto Academy Contest / S2W1 - How Cryptocurrency has Shaped the Financial Realm. What is Its Future? By @kavinsky7

On this occasion, I will try to take a Contest at Steemit Crypto Academy. I am interested in joining this contest because there are many new lessons that I will get here. The contest is about How Cryptocurrency has Shaped the Financial Realm. What is Its Future?. Lets try...

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Users are expected to briefly give an overview of cryptocurrency

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The presence of cryptocurrencies in the financial sector has become a support and substitute of fiat currency that you have always used for investment, trade and payments. In contrast to real fiat currencies, cryptocurrencies exist as digital currencies that anyone can use to do all kinds of things related to financial services such as investing, trading and payments. The concept of cryptocurrency is a form of development in the digital world that aims to provide new innovations in the financial sector without involving a central authority which has been tasked with regulating and controlling all transactions made by everyone.

The main focus of cryptocurrencies is a decentralized and blockchain-based system that has smart contracts in its operation that are able to process and manage all transactions that occur on the network. All transactions that occur will be stored and distributed peer-to-peer (P2P) on a network that has a high level of security. Cryptographic functions that run on the system have an important role in processing every transaction. In this case, everyone who uses cryptocurrency will run transactions that are fast, transparent, safe and cheap. This is the advantage that many people have been waiting for, especially investors and traders.

Bitcoin is the first crypto coin which is a tangible form that digital currency can be accepted and used by everyone in the world. Over time, cryptocurrencies continue to show rapid development where many companies and developers are launching crypto coins commonly called altcoins. Cryptocurrencies are increasingly being adopted and used by users with various needs in the financial sector where everyone will invest and trade for profit. The development of cryptocurrencies and the increasingly advanced digital world makes everyone able to make financial transactions more effectively and efficiently.

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Draw a comparison between cryptocurrency and conventional currencies

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Cryptocurrency	Conventional Currencies
Cryptocurrencies have a decentralized system	Conventional Currencies have a centralized system
Cryptocurrency does not involve a central authority or third party	Conventional Currencies involve a central authority or third party
Cryptocurrencies have high price volatility	Conventional Currencies have prices that tend to be stable
Cryptocurrencies are stored and accessed via encrypted wallets and keys	Conventional Currencies are stored and accessed through a bank or financial institution
Cryptocurrencies are digital currencies and cannot be felt	Conventional Currencies are paper currencies that are real and can be felt
Cryptocurrencies have a faster transaction rates	Conventional Currencies have slower transaction rates
Cryptocurrencies can be used for cross-border payments	Conventional Currencies are only used for domestic payments
Cryptocurrencies allow users to have complete control over their assets	Conventional Currencies allow users to have less control over their assets
Cryptocurrencies have a high risk for investment and trading	Conventional Currencies have low risk for investment and trading
Cryptocurrency can be accessed anywhere and anytime via the internet	Conventional Currencies can only be accessed at a certain place and time

Cryptocurrencies and conventional currencies also have something in common where their value can be maintained for a certain period of time. Both of these currencies have a selling value that can be exchanged or traded to obtain a commodity or service. These two currencies can be used as legal tender where buyers and sellers can transact in the financial sector based on mutual agreement. And also the use of these two currencies can be used as long-term or short-term investments with good security guarantees. Cryptocurrencies and conventional currencies are assets that can be used by everyone to meet life needs.

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Explain the distinctive innovations of cryptocurrency and its downsides

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Innovations of cryptocurrency

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1. Decentralization
   The decentralized system is one of the cryptocurrency innovations that has the most influential factor in everyone's asset management. In this case, the absence of a third party or central authority to regulate and control asset management makes all owners have full control over their assets. Everyone can make transactions in large quantities anytime and anywhere easily just by relying on the internet.

2. Blockchain
   Blockchain technology is one of the cryptocurrency innovations that shows the development of the digital world that is getting better and can be used and applied in the cryptocurrency world. Smart contracts that run on the blockchain are able to process and store all transactions that occur with a high level of security. All transactions are recorded and form a block which cannot be manipulated.

3. Profitable
   Fast transactions and low fees are one of the most preferred cryptocurrency innovations by everyone in the cryptocurrency world. This is very beneficial for many parties where everyone can do many transactions in a short time and low fees so that cryptocurrency is very suitable for investment and trading for profit. It also makes it easier for many people to make cross-border or domestic payments.

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Downsides of cryptocurrency

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1. Volatility
   High price volatility is one of the downsides of cryptocurrency that cannot be avoided by everyone who owns cryptocurrency assets or coins. The unstable price movements of cryptocurrencies in the market sometimes make some people lose and assets decrease. The balance of supply and demand is the main factor that influences cryptocurrency prices to rise and fall within a certain period of time.

2. Scalability
   Scalability is one of the downsides of cryptocurrency which is still a problem in the cryptocurrency world until now. Over time, the number of transactions that occur on the network is increasing because more people are involved in the world of cryptocurrencies. Developers are continuously improving the quality of the blockchain network where high scalability and transactions in seconds can be achieved.

3. Scams
   Scams is one of the downsides of cryptocurrency that cost a lot of people the most in the cryptocurrency world. Many irresponsible parties use anonymity to deceive people and make some people lose their assets. Address errors in sending transactions are also a problem because they cannot be returned. In this case, every sender needs more caution and research to carry out any type of transaction.

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How do you think major problems with cryptocurrency can be handled? Let this be a response to the downsides highlighted earlier

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Some of the problems that exist in the cryptocurrency world may be able to be handled or fixed over time as technology and the digital world are getting better. Errors in sending addresses when making transactions may occur due to human error or other things. In this case, it may be necessary to have a system that allows the sender to withdraw their assets in a matter of minutes. The existence of this short time span may be used by the sender if sending to the wrong address.

And also network updates and innovations are very necessary because everyone who transacts cryptocurrency expects fast transactions. High scalability may be improved by increasing the number of validators or computing power in order to be able to verify and validate transactions that occur faster. Developers from various companies are expected to continue to improve the quality of the blockchain network and transaction systems to achieve this goal.

In my opinion, the existence of scams in the cryptocurrency world must also be handled and prevented properly. In this case, the existence of regulations and supervisors from government agencies or central authorities may be used to minimize fraud that occurs. Central authorities can make rules and regulations that ensure the security of cryptocurrencies in the future without controlling or managing assets from everyone who owns cryptocurrency.

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Do you believe in the future of cryptocurrency? State your reasons. Any Recommendations?

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I believe in the future of cryptocurrencies. This is evidenced by the development of the cryptocurrency world which is getting better from various parts such as adoption, use, companies or developers, coins or assets and transactions that continue to occur all the time. The presence of cryptocurrency projects that have great potential also affects the future of cryptocurrencies such as the existence of NFT, metaverse, airdrops and others. The use of cryptocurrencies with various needs in the financial sector such as investment, trading and payments is also very closely related in daily life. Cryptocurrency as a digital currency has brought many benefits and positive impacts for everyone.

My recommendation for anyone who is in the cryptocurrency world is to do a lot of things or actions in order to make a profit. All steps and decisions taken must be analyzed and considered. Carefulness and prudence in transactions greatly affect the results of trading. Asset and financial management are important factors that must be made as good as possible because investing and trading cryptocurrencies carries a high risk. Anything that may have a negative impact or error should be avoided in order to be successful in investing and trading cryptocurrencies.