Crypto Academy Season 2 Week 6 [Homework Post for @levycore] - Learn About Cryptocurrency
My Dear Friends,
This is @ariful1998 from 🇧🇩Bangladesh
Hello friends, how are you? Hope all is well with the infinite grace of Almighty Allah. I am also well by the grace of Allah. I would first like to thank professor @levycore Sir for discussing cryptocurrency in detail. After reading this lecture I learned a lot about cryptocurrency.
Question no-1: What is the fundamental difference between Cryptocurrency and the conventional financial system?
fundamental difference between Cryptocurrency and the conventional financial system
Since cryptocurrency has no center, it trades through decentralization without the help of third parties. As there is no central authority in cryptocurrency, traders do not need permission from any central authority to trade it. Traders can trade in cryptocurrency freely as there is no authority pressure on cryptocurrency. On the other hand, in the conventional financial system, there is a central authority and the central authority controls everything, so before starting a business, traders must start business with permission from the central authority.
Cryptocurrency transactions are very easy and the transactions are transparent. Any cryptocurrency user can view the amount of transactions we have made in the cryptocurrency at any time, meaning we cannot hide the history of the amount of transactions in the cryptocurrency. On the other hand, since the conventional financial system is under the control of the central authority, no one can see or know the amount of the transaction, which means that in this system we can keep our transactions secret.
We know that cryptocurrency works in blockchain technology, so its security system is high. Hackers cannot easily hack because of its strong security system. On the other hand, the security system is very weak in the conventional financial system, so hackers can easily hack it.
There is no limit time for cryptocurrency transactions. We can transact in cryptocurrency at any time. Cryptocurrency transactions can be done at any time of the week or day.
On the other hand, in the conventional financial system, transactions cannot be done at any time. Because in the conventional financial system transactions are done through the banking system and the bank is closed on certain days of the week, it is not possible to transact at any time in this system.
When it comes to cryptocurrency transactions, the transaction fee charge is much less. But in the conventional financial system, the transaction fee is much higher.
Question no-2: Why is a decentralized system needed?
The reasons why we need a decentralized system are given below.
A decentralized system is a system in which there is no central authority. As there is no central authority in the decentralized system, users / traders can work / do business independently. We need a decentralized system if we want to execute our transactions independently without any hindrance.
It takes a lot of time to transfer funds from one place to another through a centralized system. But funds can be transferred from one place to another in a very short time through decentralized system. So if we want to transfer funds from one place to another in a very short time then we need a decentralized system.
The decentralized system has no central authority and its security is very good. Because no one has any user information in it, that is, no one can know the secret information of the user, so it is not likely to be hacked. So we need a decentralized system to ensure improved security.
If we want to transfer funds from one place to another through a centralized system, then we have to spend a lot of money. But the cost of transferring funds from one place to another through decentralized system is very low. So we need decentralized systems to reduce the cost of transferring funds from one place to another.
Decentralized systems allow cryptocurrency transactions around the world without interruption. So we need a decentralized system for smooth cryptocurrency transactions around the world.
We need a decentralized system to get the above benefits in business.
Question no-3: What affects the value of cryptocurrencies?
There are many things that affect the price value of cryptocurrency. The things that affect the price value of cryptocurrency are discussed below.
The first major factor affecting the value of cryptocurrencies is the rules and regulations. In other words, if the government of a country has banned cryptocurrency in that country, then cryptocurrency will not get any kind of investment from that country. However, the governments of many countries have legalized cryptocurrency in their countries. Due to the legitimacy of cryptocurrency in those countries, a lot of investment is being made in cryptocurrency from those countries. That is, Rules and Regulations affect the price value of cryptocurrency.
The value and popularity of a currency also affects the price value of the cryptocurrency. Note that we all know that the most popular cryptocurrency is Bitcoin. This extra popularity is also affecting the price price of cryptocurrency.
Cryptocurrency prices affect the price depending on the demand and supply of any currency in the market.
If a large businessman or many companies invest in cryptocurrency, then affects the price value of cryptocurrency . If a big traders or a lot of companies invest in cryptocurrency, its value will increase, and if it does not invest, its value will decrease.
Market inflation also affects the price value of cryptocurrencies.
Cryptocurrency also affects price for competition among many cryptocurrencies. If one can make more profit from a cryptocurrency, then investors invest in it, which reduces the value of the previous cryptocurrency. This means that if there is more than one cryptocurrency in the market, it affects the price of the cryptocurrency.
The assumptions of the big individuals involved in cryptocurrency also affect the value of cryptocurrency. Most of the time, cryptocurrency prices are affected by Elon Musk's cryptocurrency-related tweets.
Question no-4: Why can't everyone be a miner?
After reading about mining I did a comprehensive review which I realized that the reasons why everyone can not be a miner are given below.
Mining requires uninterrupted computer connection, meaning keeping computers connected 24 hours a day, 7 days a week, through a blockchain system, And to keep the computers connected uninterrupted, you will need enough electricity and a good internet system. Mining cannot be done if adequate power supply and good internet connection are not provided at all times.
The uninterrupted computer connection required for mining is very expensive. This is because keeping computers in uninterrupted connection all the time always requires power supply and good internet connection which takes a lot of money. It often becomes difficult to spend so much money on it.
The mining process uses powerful software and hardware, so they consume a lot of energy. As a result, it costs a lot of money to maintain them, so many people can not spend money according to their ability, so they can not be minor.
Moreover, crypto mining is not legal in most countries of the world. In countries around the world where crypto mining is not legal, mining is not possible for miners in those countries. If the workers of the countries where crypto mining is illegal go to do crypto mining in spite of that, then the government of that country can jail him or even fine him.
To crypto mining you have to invest some amount in blockchain network. In many cases, the money is never returned and they are locked. Many times people can't invest enough money in blockchain networks so they can't be a minor.
Question no -5: Why can cryptocurrency transactions be called more transparent?
Cryptocurrency is a digital / virtual currency. Cryptocurrencies basically transact in a decentralized process and store all transaction information through blockchain. Hackers cannot easily hack the data as all the information of cryptocurrency transactions is stored in the database of multiple computers through blockchain technology.
Cryptocurrency decentralizes transactions, meaning that it has no central authority so users can operate independently, They can work independently without any pressure from the central authorities so they are mentally better making it much more transparent.
Cryptocurrencies are traded in a decentralization process so there is no third party, here the transaction is done in a P2P process between the two people. So this process is transparent for both.
Because cryptocurrencies are transacted in a decentralied blockchain system, not all information and transaction processes are open to everyone, but everyone in the blockchain can see that someone in the blockchain has done this, so it is also transparent to the cryptocurrency.
Cryptocurrency transactions are transparent for the above reasons / benefits.
Question no-6: Explain how the development of cryptocurrency in your country?
I live in Bangladesh. Bangladesh is a developing country. Due to the backwardness of the people of Bangladesh in information technology, i.e. the lack of knowledge of the people of Bangladesh in information technology, most of the people of Bangladesh do not know much about cryptocurrency. The Bangladesh government has banned all types of cryptocurrency transactions. If the people of Bangladesh are involved in any type of cryptocurrency transaction and if they are caught in the hands of law enforcement, they will be jailed. A few days ago, a Bangladeshi man was arrested by the Bangladeshi police for being involved in bitcoin trading and the court ordered him to be sent to jail. For this reason, the people of Bangladesh do not want to do cryptocurrency transactions. But now many Bangladeshis are investing in cryptocurrency seeing the benefits of trading in cryptocurrency. It is hoped that many Bangladeshis will invest in cryptocurrency in the future seeing the benefits of trading in cryptocurrency. It is hoped that the Bangladesh government will soon legalize cryptocurrency transactions in Bangladesh considering the benefits of transactions in cryptocurrency.
After reading carefully the details of cryptocurrency discussed in this lecture, I have gained a lot of knowledge about cryptocurrency today. Cryptocurrencies are traded through blockchains in a decentralized system. Day by day people are showing interest in investing in cryptocurrency considering the various benefits of cryptocurrency transactions. It is hoped that in the future cryptocurrency will become the main medium for transactions. But because cryptocurrency transactions are illegal in our country, the people of Bangladesh do not have the courage to take the risk of transactions in cryptocurrency. It is hoped that the Bangladesh government will soon legalize cryptocurrency transactions and the people of Bangladesh will also invest more in cryptocurrency.