Crypto Academy Week 14 - Homework Post for @levycore: Learn About Cryptocurrency
Hello Steemit and its users! This is my very first entry in this Steemit Crypto Academy organized by the @steemitblog itself and its professors. I have made myself a quick walkthrough to the homework including the past challenges and I am so excited to share what I learned before about cryptocurrencies especially bitcoin plus the latest trend of the crypto world.
I would like to thank first @levycore for making this homework possible and to @steemcurator01 and @steemcurator02 for the unending support, they're giving to the steemit users!
Let's define cryptocurrency!
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.
After the creation of Bitcoin, many cryptocurrencies were sprouting on the internet, most of them were similar to bitcoin in use-case while others have an extra advantage in their underlying technology and scalability of operation. All are created for the purpose of disrupting the traditional baking system which is very easy to corrupt, control, and manipulate.
What is the fundamental difference between Cryptocurrency and the conventional financial system?
Cryptographic money or cryptocurrency is a computerized cash that depends on encryption techniques to direct the production of money units and confirmation of asset moves without the association of an incorporated position. This decentralization is a result of the age of a blockchain that fills in as an exchange data set accessible to all clients and capacities as a disseminated record. Bitcoin is the principal cryptographic money of such kind. Bitcoin was made in 2009 and has since been trailed by other digital currencies periodically called altcoins or elective coins.
The exchange cost in cryptocurrency is low to nothing by any means other than the traditional financial system—not similar to, for instance, the charge for moving cash from an advanced wallet to a ledger. You can make exchanges whenever of the day or night, and there are no restrictions on buys and withdrawals. Furthermore, anybody is allowed to utilize digital currency, not at all like setting up a ledger, which requires documentation and other desk work.
The core differences between the two are:
Cryptocurrencies are decentralized in nature meaning no one is controlling the entire system but the whole system itself built by protocols that are close to immutability. And if there's a course of action that should take place, consensus via miners are required in changing fundamental and basic features of the blockchain, the tech behind bitcoin and cryptocurrencies. On the other hand, the conventional financial system is centralized and on a brink of collapse at a single point of failure.
Cryptocurrencies are non-inflating supply or sometimes can be deflationary in nature. While traditional financial systems are susceptible to hyperinflation and unlimited supply that can cause of degradation of purchasing power.
Cryptocurrencies can be transacted in a peer-to-peer model while traditional requires the aid of the middle man or third party involvement making it more inconvenient on users' side because of possible backlogs that may arise. In cryptocurrencies, transactions are fast and cheap.
Cryptocurrencies are safer than the traditional ones because, in crypto, you are the one controlling your account and handles your own security measures and credentials. Unlike traditional financial systems where anytime and anywhere, your funds are at risk, or it may collapse in an instant due to its centralized nature.
Why is a decentralized system needed?
The issue of centralized systems for example in cryptocurrency isn't just about the consensus of development and the subsequent absence of information about nearby conditions, yet additionally the security in needed and support from users. Significant contentions for decentralizing cryptocurrencies are that it: makes an effective and dependable blockchain, increases and improves financial technology, better guarantees the privileges of the users about rewards, incentives, and to have a voice in the development. To achieve this kind of decentralization a blockchain technology in rising needs to have specific security in their reality, adequate assets, and community-driven rule. Their activities should be tenable and straightforward, and they should develop reasonable associations with better backing development leads.
The core value of bitcoin and cryptocurrency is decentralization. There is a need for decentralization because the sole purpose of crypto is to mitigate trust issues within the financial community. For the same reason, it needs to have security enough to hinder an action that will override the whole blockchain in one and this is where the consensus mechanism takes place. Decentralizing the blockchain means allocating or distributing powers to the community as miners and miners come in 2 different ways, via Proof of Work mining and Proof of Stake mining.
What affects the value of cryptocurrencies?
Cryptocurrencies are unpredictable, and we as a whole are very much aware of them. The report about ongoing crypto highs and lows springs up consistently in our feeds, establishing the overall connection that crypto is something interesting to manage. Like any cash, digital forms of money acquire their worth depends on the size of the local area association (like the client interest, shortage, or coin's utility). All things considered, having as a main priority, the greater part of the computerized coins available are given by private blockchain-related organizations, a few components of crypto worth will come from the picture and productivity of these organizations (like undertaking's suitability and seen esteem). Allow us to make an overall outline of what makes cryptocurrencies significant.
Utility - To make digital money important one requirements to make it usable. Any cryptographic money is fundamentally a sign of utilizing a decentralized advanced record — blockchain innovation. So to make your crypto coin utile, you need to make it usable inside a certain blockchain biological system. Allow us to accept Ethereum as a utilization case. You can't begin utilizing the Ethereum stage without an Ether — a coin, exceptionally customized to "fuel" the exchanges inside the Etereum stage. As needs are, the worth of Ethereum relies upon the interest for the stage's administrations. The utility can likewise incorporate profit installments, method of trade inside a blockchain environment, casting ballot rights, and so on.
Scarcity - Shortage represents the limited idea of the advanced coins. In the ideal situation, the interest ought to dominate the stock of the coins, to make it more important. For instance, the limited inventory of Bitcoin never goes past 21 million coins. As the most famous crypto on the lookout, Bitcoin in this way appreciates the incredible interest and an ascent in esteem. In a bid to fuel the ascent in esteem, a few monetary standards apply an alleged "consuming" system, annihilating a piece of the coin supply.
Total Project Value - Any digital money esteem relies upon the general suitability and progress of the venture improvement. Tasks that continue creating, accomplishing one achievement after another, building up worthwhile associations, or dispatching easy-to-understand programming to turn out to be more significant according to the market. These are pointers, to a great extent adding to the positive opinion around the venture and influencing the worth of its digital currency
Why can't everyone be a miner?
To place it into extremely straightforward terms, crypto mining is an interaction where a machine plays out specific undertakings to get a tad of cryptographic money. Your PC would perform explicit errands that are needed to have the option to get even the smallest measures of digital money. These errands are classified "Proof of Work", and they are intended to make a reasonable battleground for every one of the various excavators out there. There are a couple of ways you could go about digital currency mining. We have cloud mining and hardware mining like GPU and ASIC for example.
But why can't everyone be a miner? It is because there are certain requirements and resources needed to successfully establish a mining environment. One major requirement is the hardware resources for the proof of work mining. Hardware like GPU and ASIC miners are responsible for processing transactions inside the bitcoin blockchain. This hardware is not cheap and they are certain to deteriorate if it's specifically used and extracted to mine newly created bitcoins.
Another thing is hardware mining for proof of work consensus blockchain consumes a lot of energy and electricity, not to mention it emits carbon as waste that is undisputedly harmful to the environment. Some environmentalists are well concerned about this bitcoin mining and they're always aware of the current conditions of carbon emission due to the rising mining industry.
Why can cryptocurrency transactions be called more transparent?
Cryptocurrency transactions are transparent as blockchain protocol implies. They are simply made to be transparent to give more legitimacy and truthfulness to the technology especially that it involves monetary circulation and distribution of services. All cryptocurrency transactions are made to be public so that not just validators or miners have the responsibility to validate a transaction but also the whole community who contributes to the development of the public ledger including security and real use-case or utility. For example here in steem blockchain, all transactions in steemit interface, like the upvote, the posting, and commenting were all recorded publicly to provide verifiable data that are true and immune to dual-spending. Witnesses verify these data and accept and added them to the chain.
Explain how the development of cryptocurrency in your country?
Similar to the rest of Asian countries, Singapore is also strict yet open to regulations and governing institutions to regulate and protect Singaporean crypto users alongside availing the services of cryptocurrencies and blockchain technology. As a matter of fact, Singapore is very welcoming in innovations and integrations of blockchain tech into their financial and industrial services.
The Monetary Authority of Singapore is keen on any illegal applications possible to cryptocurrencies namely, money laundering, and other crypto-funded contradictory parties aiming to destabilize the Singaporean economy through the use of cryptocurrencies. But crypto adoption is inevitable in the country that later on bills and laws were passed to protect the integrity and usefulness of cryptocurrency in financial services like payment models, public presentation of immutable data, and consensus-based systems that can be integrated into the latest trend of the country.
Singapore's crypto-accommodating mentality and adaptable administrative offer a climate to work with development and advancement in the fintech business. MAS has been steady of crypto new companies and firms trying different things with digital money and blockchain advancements. This well-disposed environment has been a magnet for a few major crypto organizations from nations like Japan and China setting shop in Singapore.
Conclusion
In general, cryptocurrencies are still in the infant stage of development. Just like how people unwelcomed the internet before, so as the crypto is today. But, developments are in progress and to say that we are not going anywhere with crypto is so absurd to claim. Utilities are clear manifestations that crypto is the future of banking and financial services. Maybe it will take a lot of time as adoption is severely hindered by the top of the society but time will tell that none of the top of the wealthy individuals wanting no more about cryptocurrencies. As for the best crypto out there, I can say that bitcoin performs well in aspects of blockchain technology and use-case but I can also say that someday, the best cryptocurrency will emerge and will flip the tops of all.
Hi @jankit,Thanks for submitting your homework
Feedback: Unfortunately. your reputation is below 50. you cannot join Steemit Crypto Academy
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Hi thank you for the response. I would like to ask for a reconsideration since my reputation is nearing 50. But if not, I'll try to get the 50 rep and join next time.
@steemcurator01 @steemcurator02