Wow, really great lectures.. Thank you prof. @levycore for this wonderful lectures. I have really acquired more knowledge on crypto currencies and it's operations.

Now to the assignment proper.

            QUESTION 1

What is the fundamental difference between Cryptocurrency and the conventional financial system?

MY ANSWER
First of all before we dive into the difference between this two financial terms I think we should understand this terms, which I will do below;

Cryptocurency: There are digital currencies e.g the Bitcoin, Tron, Steem, Dogecoin etc. Which operates in a Decentralized blockchain system. In which the activities of this blockchains helps in either the growth or fall of this digital currencies.

Conventional currency: These are real currencies e.g the Dollar, Naira, pounds etc. Which operates in a Centralized system. And this system serves as third party for the operation of this currency.

The differences between the two currencies

Fraudulent activity

• In the Cryptocurency system it is very difficult to carry out fraudulent activities on Cryptocurency, since they exist on a Decentralized blockchain. But then if an individual has access to your details/keys and successfully carries out a fraudulent activity on your account, the blockchain automatically records all the transaction and the name of the individual that the transaction was made to, with this tracing is very easy for returns to be made.
  While
• In conventional financial System it is very easy to hack an account and block all traceable tracks of the hackers. With just some of your personal details even if not your pin exactly, your account can be hacked and your funds transferred out in seconds.

Anonymity.

• In the Cryptocurency system which includes digital assets such as Bitcoin, Tron, Steem etc, they operate in a Decentralized system. In the operation of this kind Currency, there is no controller, like the highest authority, i.e you don't need a third party verification before Carrying out your transaction. It basically uses a peer to peer method, where assets are directly transferred to the receiver and the equivalent amount in fiat is sent to the sender.
  While
• In the Conventional Financial System which includes real currency's such as USDollars, Pounds etc. They operate on a Centralized system, which needs a third party for approval or approval of the authorities in the bank for transactions to be successful. Without their approval then your transaction hangs.

24/7 operation

• In the Cryptocurency system the operations of this currency is not bound by time or days. As at any time or day you can carry out a transaction of the asset without restriction.
  While
• In the Conventional Financial System the operations of this system is bound by time and days.. Like in Nigeria, the operations of the banks ends by Friday and each day it's activities ends by 4pm and this is a serious issue for users. Now assuming you had an issue of blocked ATM or failed transaction at the week end, then you have to wait till Monday to rectify your issue and that will be very disappointing if the money was to be used urgently.

Reversal of Transaction

• In the Cryptocurency system after transaction has been made it cannot be reversed. This is so because the blockchain does not control transaction, so there is no body to run to. Except the receiver decides to send it back.
  While
• In the Conventional Financial System the after a wrong transfer has been made the bank which stands as a third party for every transaction. They will always help out with the returns/rectification of this transaction. This is possible since they have control of the accounts operations.

             QUESTION 2

Why is a decentralized system needed?

MY ANSWER
This system has proven to be very important in financial operation, and I'll let us know with the reasons below;

Transparency.

In the DECENTRALIZED system like I mentioned earlier, every transaction carried out is seen by everyone. You don't even need to have the persons key to know the transaction carried out on his account.

low transaction cost

While some asset on this platform don't even charge anything on transfer of assets to other account, some asset charge very low and this characteristics of the Decentralized system drags people to the use of the system.

24/7 operation

Like I had mentioned afore, the operations of the Decentralized system are not bound by time and days. Transaction can be done at any time and day since everything is controlled by you and is digital, so u just need access to your device to succeed in the market.

Members total control

In this system, every members have control over the workings of the system. No highest authority has the power to dislodge your account. All the information of your account is only known by you. This is so because information to your account is not stored on one system but on different computers working independently of the other.

Difficult to hack

In this system, since the information is not stored on a single computer then the system is very difficult to be hacked. So an hacker needs to have Access to your keys to log into your account and carry our fraudulent activities.

             QUESTION 3

What affects the value of cryptocurrencies?

MY ANSWER

Alot of factors influence the value of CRYPTOCURRENCIES which I'll state below;

Fundamental news

Here it is very important to know that some information sent out about a particular crypto asset can either cause a decrease or increase in the value if such asset. Now if such information is on the mother coin which is the Bitcoin then all other altcoins are affected automatically since most of them leverage their operation from the Bitcoin.

An example is what is happening to Bitcoin right now, just because of Elon Musk saying that Tesla won't be bought any more with Bitcoin. From this news alone people had to panic sale thier coins causing a high level of supply in the market, bigger than the demand making the value drop automatically.

Market price volatility

The volatility if the crypto market have really scared away investors. Investors who are not hodlers may not have the so much patience to see the bull and bear trend of the asset they are investing in. So this alone scares away top investors who would have caused the value of the crypto market to bull sporadically.

Demand and Supply

The activity of the demand and supply of a particular asset has a way of causing the bull and bear of that asset.

Now when there is too much of such asset supplied or mined into the market, and there is no equivalent demand for it, then automatic bear trend occurs but when the reverse is the case then the bull experience is eminent.

             QUESTION 4

Why can't everyone be a miner?

MY ANSWER

What is mining

Mining is a process of reproducing or creating more crypto asset into the market space and recording of transactions in the blockchain. This is done by the application of some mathematical principle to create algorithmic values that come into consensus for an asset to be produced.

Now mining is carried out by nodes who first find the hash right, convince other nodes to come into consensus, thereby bringing the asset to bear. This process that looks very simple is very complex, were miners have to solve very complex mathematical problems to be able to come up with a mine.

When transactions are made the miners will encrypt the transaction which is converted to blocks. Now the miners generate a hash code, use this code to encrypt the blocked Transaction details, and then subsiquently store them as blocks in the blockchain, with this it is very difficult and impossible to hack transaction histories. In cases of malicious activities.

With a knowledge of what mining is, let's understand why everyone can't mine then.

• the complex mathematical resolution makes comprehension by alot of persons very difficult and so it needs special understanding and technical know how to carry out this mining process.

• high cost of mining equipment.. like the computers, routers, GPUs, etc. So not everyone can afford this.

• high cost of maintenance of this equipment and this is a serious limitation too.

It is worthy of note that this mathematical resolution is called a consensus algorithm. And each assets operates on different algorithms. Like the Bitcoin operates on proof of work. We also have the proof of stake, proof of Delegated stakes etc.

            QUESTION 5

Why can cryptocurrency transactions be called more transparent?

MY ANSWER
Transparency in crypto currency Transaction is possible because it's exist in a Decentralized blockchain where every information is presented in blocks and pasted in the blockchain. With this action it is impossible to temper with the information because every members of the block will be notified if a malicious attempt wants to take place.

The miners after a transaction has been Carried out(validated), generates a hash code by the help of nodes, and encrypt this Transaction which will be presented in blocks and store in the blockchain.

Now, by storing it in the blockchain, you need to compromise the account of all the members of this chain to be able to carry this out malicious act which is rather impossible.

           QUESTION 6

Explain how the development of cryptocurrency in your country?

MY ANSWER

In Nigeria.

As at 2019 crypto currency was allowed operations in the country by the federal government. Through the Finance Minister to the Central Bank of Nigeria (CBN).

So banks were allowed to carry out crypto currency Transactions, you covert to fiat through banks.. some banks in Lagos began to adopt it as means of payment. And this boosted it's activities in the country.

But very recently, this year 2021, claiming that people had stated using it for fraudulent activities prohibited it use and direct all backs to freeze account still in use of it. Below is what they said;

The CBN stated in the Press Release that cryptocurrencies are issued by unregulated and unlicensed entities and as such, the use of cryptocurrencies in Nigeria contravened existing law as they are not legal tender. It also identified the anonymity of cryptocurrency as an issue. It stated that anonymity and the lack of KYC made it susceptible to illegal use such as money laundering and the financing of terrorism. Another justification was the volatility of cryptocurrencies which it said has threatened the stability of financial systems in other countries.
Source

So currently, crypto is prohibited in my country.

Conclusion

The knowledge of Crypto currency is very important for all traders and intending traders. So to know were and how to invest.
In the near future of the Cryptocurency and the Conventional Financial could could be merges together then we would experience a great financial impact in our economy.

Thank you