Crypto Academy Week 14 - Homework Post for @levycore by @mayrelisvasquez
Crypto Academy Week 14
Learn About Cryptocurrency
Hello greetings to all the steemiats this week we will discuss a very interesting topic the difference between cryptocurrencies and conventional financial systems, if you are new to this topic and you came to this post by chance, do not stop reading since you will find interesting things that you surely did not know Before starting I want to clarify that this post is part of the task proposed by @levycore for week 6 of the second season of the Cryptocurrency Academy. greetings from venezuela professor.
1- What is the fundamental difference between cryptocurrencies and conventional financial systems?
The fundamental difference is that they are faster and safer, cryptocurrencies run under a chain of blocks make them more efficient in every way, something that does not happen in a conventional financial system since these financial systems, transaction records are hidden , the number of accounts created as well, as well as the businesses that these institutions do, since these records are only managed by those in charge of the banking institution, in the decentralized financial system where cryptocurrencies make life, this would never happen since there is a Total record of everything, and each transaction is auditable by anyone, from how many coins have been transferred to the number of coins that each wallet has, everything is verifiable, since it follows a chain that although it cannot be modified, it can be observed in details each block that contains this valuable information, something that does not exist in the conventional financial system, One of the things that It must be borne in mind is that cryptocurrencies do not have limits on transfers how many times it has not happened to us that we have exceeded the transaction limit in a traditional bank, and we have to wait a working day to be able to carry out another transaction, and it is precisely Another advantage that cryptocurrencies have since they are business days every day there are no Saturdays or Sundays so to speak since some conventional banking institutions do not allow transfers on weekends, for example in my country it is like that, if you make a transaction on Saturday the money reaches the destination account on a Monday.
2- Why is a decentralized system needed?
It is necessary because most centralized systems play with their users, the money saved in said platform is invested in businesses where only the owner profits from these, another thing to keep in mind is that if the entire financial system were decentralized , people would have decision-making power in their investments, since these would also be free, this type of decentralized systems incentivize people to create liquidity in savings and loan pools, only the people who decide to generate liquidity to these pools earn interest, not only to the majority owners of the centralized system, that is why decentralization is necessary, people have their money in their wallets and no one can touch that money without their concentration, decentralized systems are safe systems and provide speed and unlimited transfers , all these things make the decentralized system a system that the world needs, and not a closed system where only a small group take the profits from the investments and decide and invest with the money of the people who trust them.
3- What affects the value of cryptocurrencies?
The currencies are fluctuating assets therefore there are many things that make a currency rise or fall in price, below I will name several factors that directly influence the price of these currencies.
Violation of security, this is a key factor in the safety of the coins, and a possible hack of a coin can make everyone panic and decide to sell their coins this is one of the main reasons why the price drops abruptly .
That the currency is not accepted in an important exchange, this is another possible cause of the fall in prices, if an exchange unlisted a currency, the safest thing that is a blow to the economy of said currency, and therefore its price fall.
Negative news, the news is a pillar in the current world where we live, and bad news about a certain currency will make its price fall a few dollars, and more if it is news of vulnerability of its security.
Influential characters, there are people who influence the market, and a comment on a television program can cause the currency to fall in price, that is why you have to be informed at all times.
Fomo, is an expression to describe the fear that a currency will fall in price, and if this affects only users who have invested their money since if the currency begins to fall in price and savers suffer from this evil they will make sell everything to recover their profits, and if a chain effect of these actions is created, the currency can step on historical funds.
And finally one of the things that would make a currency fall in price is that people stop trusting this currency, that is, they decide to sell it because now they like another project or because it no longer generates the profits that they had before or they simply want to explore new horizons.
4- Why can't everyone be a miner?
This question is important, since by logic it can be deduced that not all of us can be miners, since each group of people represents a role in the world of cryptocurrencies, apart from several technical details that are explained below,
For example, people who are dedicated to mining coins are people who invest a lot of time and money, since although it is true that the machine does all the mining work, these people in charge of mining must always have their equipment up to date, updated , and maintain it constantly.
A miner normally invests a lot of money to be able to effectively mine any coin, since as more blocks are created, the miner in question needs to have more mining power, and the mining machines are not very cheap to say.
Not everyone can mine since logically they must have the basic knowledge of what algorithm their machines support, and the installation and adaptation of the cooling zone of the machines.
Another of the big problems that arise when mining is energy, imagine if all the people in the world mined coins, I do not think there is the amount of energy to support that, apart from the environmental impact would be terrible, so for Luckily, energy represents one of the biggest barriers to successfully mining a currency.
Another thing to keep in mind is that if many people mine the rewards they would decrease, this would force the miner interested in earning more to invest more money.
Logically, if there are more miners, the difficulty of obtaining profits would increase, and therefore the price of the currency that is being mined could have an adjustment either downward or upward.
5- Why can cryptocurrency transactions be called more transparent?
These transactions have the advantage of being executed on a blockchain, these blockchains have the characteristics that each transaction can be verified, this means that anyone can review the transactions no matter where they come from, another of the things that people can verify is the number of coins that exist, the number of blocks mined, number of accounts created, and the balance of each one of them, since the record of all this is in the same chain of blocks, another of the things that can be done is to verify how many existing nodes there are in the network, since the nodes are the ones that verify each transaction, this makes those transactions completely safe, since it is impossible to edit them or delete transaction blocks or accounts.
6.Explain how the development of cryptocurrencies develops in your country.
Currently in Venezuela there is a cryptocurrency regulatory entity called sunacrip in which all people who work with cryptocurrencies must register and register their cryptographic work on this platform so that the government can control everything that is cryptocurrency. So the movement of crypto assets is legalized in Venezuela.
Development in the country is somewhat advanced, the government already has plans and laws that include miners and people who invest in cryptocurrencies, there are also ministries of cryptocurrencies and a cryptocurrency of the nation, currently Venezuela has several active cryptocurrency projects but the best The one known to all is the petro, the currency of the Venezuelan government, which was created with the intention of helping the residents to facilitate transactions and purchases of services and products.
This currency has never been consolidated and it has not achieved its purpose since it is a little worked and centralized currency, just to acquire this currency you have to do an almost similar procedure as if you were to acquire an oil bond, that is why so many people do it. has but does not use it
It is important to say that 70% of Venezuelans have a petro wallet but its difficulty in using it makes no one worry about using this currency in a few words it is a currency that was born dead thanks to state policies that instead of facilitating the process and use of these cryptocurrencies what they do is stop it with incorrect policies.
One of the things that is taken into account is that mining in Venezuela is legalized, there are laws and conditions that apply to miners, these laws have been years since the implementation of the national cryptocurrency, but no one knows these laws since few do. They apply as it is, and to this day I still hear rumors that people are being detained for the simple act of mining cryptocurrencies.
Other currencies that are widely used in the country are the usual classics such as BTC ETHER, DOGE, LITECOIN, the government has focused on these because they are the most famous and have more stability that is why their centralized exchangers can be trade with these crypto currencies.
7- Conclusion
To conclude, it is important to say that Cryptocurrencies are the future of the world economy, traditional systems, every day are more obsolete, either due to their restrictions or delay or commissions that they charge when making a transfer, that is why the Every day more and more people adopt a decentralized system with cryptocurrencies, not for nothing every day companies decide to pay now in cryptocurrencies, since the transactions are verifiable, they are fast and transparent, something that we all look for since in traditional systems it is impossible to audit these transactions by Unless you are a powerful entity, but without a doubt the decentralized economy is here to stay and we are experiencing the transition from centralization to decentralization.
CC:
Greetings @mayrelisvasquez! You have developed excellent content, I wish you the best result in your rating :)
Hi @mayrelisvasquez , Thanks for submitting your homework
Feedback: You have completed every point and you have understood the basics of cryptocurrency
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