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

Hello crypto enthusiast, welcome to my article where I will be discussing how cryptocurrency has shaped our financial realm. So let get to the topic of discussion.

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An overview of cryptocurrency

Cryptocurrency is a virtual currency protected through the use of cryptography. For many years ago they have been many attempt to create virtual money to reduce the dependent of paper money, but all attempt in the past fail due to the way most were approaching the problem. They is a need for a financial system where people will be in control of their owned money. We have seen in the past when they is economic crisis and some banks closes up with customer money.

In 2009, someone under an assume name called Satoshi Nakamoto created the first successful cryptocurrency Bitcoin. This success was due to the use of blockchain technology which serve as a storage component for Bitcoin. Blockchain is where all transactions are stored and it also provide security by spreading the network around the world and this makes it almost impossible to alter any data on the blockchain.

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With the success of Bitcoin, many cryptocurrencies has been created for different purposes such as Ethereum, Steem and Tron. Even though, most of this cryptocurrencies are created for different reasons they all still have something in common which is decentralization. This means no one is in control or a central power dictating what to do or not to do, the blockchain technology eliminate that possibility. So irrespective of where you are from, who you are, you can send, receive, sell or buy any cryptocurrency of your choice.

Comparison between cryptocurrency and conventional currencies.

In order to answer this properly I will draw similarities as well as differences.

Similarities

-Store of value: Both cryptocurrencies and conventional currencies store value which means they can be both use as legal tender for something worth the equivalent value. We use money to buy what we want and some businesses accept cryptocurrencies which can also be used to purchase anything equivalent to the token price.

-Storage: Conventional currency over the years have always been stored in the bank where we feel our money is safe likewise cryptocurrencies, we store them in our wallet because we feel that is the safest place they could be.

Divisibility: This is a common similarity where both cryptocurrency and conventional currencies can divided into multiple portion. For example 1 steem can be divided into different unit and 1 dollar into different cent.

-Varieties: There are different kind of cryptocurrencies example Bitcon, Ethereum, Steem and Tron. The same goes for conventional currencies where there are different kind example USD, Euro, Pound and Naira.

Differences

-Transparency: All cryptocurrency transactions can be look up by anyone due to decentralized ledger which all transaction are record on. This is not the situation seen on conventional currency because all transactions are not transparent only the bank authority, sender and receiver knows about the transaction.

-Stability: Conventional currency are stable and also a bit easy to manage when comparing to cryptocurrency which price fluctuate with time and owner need to be careful on what token to buy or hold which makes it hard to manage.

-Centralization/decentralization: This is the major different between cryptocurrency and conventional currencies. Conventional currencies are centralized which makes it under many rules and regulations and a single point of failure can halt the whole system while cryptocurrency been decentralized means it is not under anyone rule or authority and a single point of failure cannot affect the whole system.

The Distinctive Innovations of cryptocurrency and its downsides.

Cryptocurrency brought many distinctive innovations which is shaping our financial sectors. A good example is how it changing the way we carry out daily transaction such as our payment system. Many businesses around the world have started adopting cryptocurrency into their payment system. Now their customers can pay for any product with cryptocurrency without the need for any third party (bank).

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Without the involvement of third party, transaction free is reduced, fast and payment can be made from anywhere in the world. Crypto trading is a profitable market which attract many investor from around the world. With your exchange wallet, any user can invest in any crypto of its choice and with proper research the possibility of return is high.

Crypto is putting people back in charge of their asset with great transparency but all these advantages comes with some downsides which discourage some people and some of this downsides are;

The major downside with cryptocurrency in my opinion is that fact that you transaction are irreversible, the moment it been registered on a block it can never be changed. This may seem as a good security feature but most users new to cryptocurrency often make mistake by using the wrong address while sending or receiving any token. Most times they is no one to complain to or even if they is, nothing can be done and all those assert are gone never to be recovered.

The second downsides for me is the issue of price volatility which may prove advantageous to trader but for investors this could be a nightmare. Investors who invest in a certain token and wish to sell after price raise in the future this is under probability as they is no certainty that price will increase with time.

How the problems stated above do can be solved

A simple solution in my opinion is if users have a way of knowing the address of whom they are sending the funds to will really help. For example if the name and the token which the address belong to is shown before sending, this will really go a long way as users can verify this information before sending. Also maybe a protocol where transaction can be reverse within few minute of sending will also help reduce this problem.

In respect to the crypto volatility, this is due to demand and supply of a token. This has given some trader opportunity to making profit by buying at a low price and selling at a higher price but I think before cryptocurrency can be wildly accepted as an overall means of payment the price has to be stable to an extent. This problem can be resolve if they is a reserve where funds are used to balance up whenever a token seem unstable.

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

Yes I do believe in cryptocurrency. Human has always be evolving from Stone Age to Information Age, our finance is no different. We started by exchanging goods for goods (trade by barter) than money was introduce in form of metal and paper. With advance in technology, we are able to send money through internet.

We can see how gradually we have progress. Although, this revolution form one stage to another takes time but we eventually got they, so I know cryptocurrency is the next stage of our finance due to its numerous advantages. With time I believe solution will be fined for most of the feature discouraging people and after that happens, crypto will take off and it will be wildly accepted as the best method of payment.

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For crypto trading, I will recommend instead of a short-team trading you should look more at the future and invest on long-time basis due to it higher probability of higher profit but make sure you do a proper research before any investment.

Thank you for reading.