STEEMIT PAKISTAN CRYPTO COURSES SEASON 1 || HOMEWORK POST FOR @naqshraja1

steemdoctor1 (76)in STEEMIT PAKISTAN • 3 years ago

Assalam-O-Alaikum everybody and welcome to this post. I am very glad to know that the STEEMIT PAKISTAN community has started an amazing session of the crypto lectures. As the Steemit Crypto Cademy is on a break so it is a very good time to provide the same environment in the official community of Pakistan.

Today I am here to present my homework for dear professor @naqshraja1. I have read the whole of the lecture post and understand all the basics of the cryptocurrencies that she had described in his lecture. Now, I will describe the best possible answers to all of those questions that are asked by her as the assignment of this week. So, let's start our task without wasting any time.

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There are some questions asked by the teacher so I will describe all of them in a given order.

(01)

What is the difference between Cryptocurrency and the traditional financial system? What are the Pros and Cons of Cryptocurrency (Write at least five)

Intro
First of all, I am going to discuss the about cryptocurrencies. The word 'Cryptocurrency' is derived from two words, the first word is 'crypto which means 'hidden' or 'privacy', and the word 'currency'. So, the whole meaning of the word cryptocurrency is that the currency that is hidden or which can be seen with the naked eye but cannot be touched and felt but can be used for purchasing and marketing purposes.

The traditional finance system or the conventional finance system is the recent finance system of money management which includes banks, governance, paper money, etc. The currency of the traditional finance system is named Fiat Currency and is used in the whole of the areas of life.

So, now I will discuss the basic differences between the traditional finance system and the cryptocurrencies in the form of tabular data.

Cryptocurrency	Traditional Finance System
Cryptocurrency is the newly developed and modern financial system in the form of digital currencies.	Traditional financial system is the recently used finance system.
The cryptocurrency is a decentralized system and there is no need for a central authority for the control of transactions.	Traditional financial system is a centralized system and there is a central authority in the form of the bank for the transaction of money.
In cryptocurrencies, the users have a free hand to utilize their money and they have complete control over the transaction and funds.	In the traditional financial system, the funds and the transactions are under the control of a central authority like banks.
Making transactions in cryptocurrencies is no much time consuming and the transfer of money is just one click away from the user.	In the traditional financial system, if someone wants to send or receive money then he had to go through a complex process of KYC which is really time consuming process.
It is very easy and simple to make transactions throughout the world	It is a complicated process to make transactions in the traditional finance system.
Users of cryptocurrencies can make transactions anywhere throughout the globe and whenever they want.	In this system, the money transferring process is complex.
The transactions are not refundable if gone wrong.	The transactions are refundable in many cases.
The transaction details and the sender and receiver addresses are not traceable in this system.	In this system, the complete details of the sender and receivers are stored in banks and are traceable.
We do not need any permission for making transactions in this system.	We have to seek permission from the banks and governance for money transfer.

Mentioned above are some differences between both of the finance systems (cryptocurrency and traditional financial system).

Pros and cons of Cryptocurrency

As I have described some basic differences between cryptocurrencies and the traditional financial system so now I am going to discuss some advantages and disadvantages of cryptocurrencies.

Advantages:

The first and the most important point in the favour of cryptocurrency is that the money in this system is in the ** hands** of the users on their own.
There is no involvement of any third party while making transactions in cryptocurrencies.
The transactions are under the control of the individuals instead of the banks, as in the conventional financial system.
Users of the cryptocurrency are free to use their currency anywhere at any time without any restriction.
Transactions made on cryptocurrencies are untraceable.
The transaction speed of cryptocurrencies is much higher than the traditional finance system. For example, the transaction speed of bitcoin is 10 minutes and there are many other currencies that have transaction speed in seconds i.e, TRX.

Disadvantages:

One of the disadvantages of the basics of cryptocurrency is that the market of crypto is highly volatile. The prices of the coins are variably increasing and decreasing and such fluctuations harm the traders.
Another fault that cryptocurrencies face is that as I have told above that it is a decentralized system so some ugly people and hackers use cryptocurrencies to do money crimes.
Regulation of cryptocurrencies is also a major problem with them.
In some areas of the world, including our own country Pakistan, cryptocurrencies are not legal. This thing really harms the values of the cryptos.
Some cryptocurrencies are also facing the scalability issues.

(02)

What are the objectives behind the creation of Bitcoin?

Whenever we hear the word 'cryptocurrency' then the first name that comes to our mind is Bitcoin. Yes, Bitcoin is the largest and the first-ever cryptocurrency which is considered to be the King of all the crypto coins.

Bitcoin(BTC) was first time introduced by Satoshi Nakamoto in 2009 and he was the first person who gave converted the idea of decentralization into reality. But it is very surprising to know that even after 11 to 12 years of the discovery of Bitcoin, the real face of Satoshi Nakamoto is not revealed. There are many theories about the identity of Satoshi Nakamoto based on different concepts and logic. However, the progress of Bitcoin in the digital world and the work of Satoshi Nakamoto is really appreciable and it provides anonymity to the digital world.

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There are several reasons behind the creation of Bitcoin and some of them are listed below.

The first and the most important reason behind the creation of Bitcoin is to create a decentralized system that does not depends on the central authority like banks, semi-governance, etc. Satoshi Nakamoto wanted to develop such a system in which the transfer of money from one place to another place can be done without the involvement of the central third party. So, he worked to develop Bitcoin.
Another reason behind the whole scenery was that the recently used traditional financial system was created many problems because it was centralized and there are many chances for the central authorities to do corruption. So, Satoshi Nakamoto decided to get rid of such a finance system.
The transactions that are made on the centralized finance system are proved very costly for the users so, with the creation of Bitcoin, this problem is also solved because the transactions that are made in Bitcoin are less costly than the conventional finance system.
As the process of making transactions in the traditional finance system was a time-consuming process because it required proper KYC verification and other processes so Bitcoin was developed to overcome this problem. The transactions that are made on cryptocurrencies are so efficient and time-conserver. Bitcoin has the power to deal with 7 transactions per minute. There are many other coins in the crypto world that can make transactions within seconds. So, this thing is a really impressive one.

So, these are some reasons behind the whole of the scenery according to my views. I think that the work of Satoshi Nakamoto was really exceptional and the whole of the credit that the blockchain technology that has been developed in these days goes to him as the creator of Bitcoin.

(03)

What are the differences between Wallets and Exchanges? Which is better in your opinion?

After the basic discussion about cryptocurrencies and fiat currencies, I am going to briefly explain the crypto wallets and the crypto exchanges. So, have a look at the below sections.

Crypto Wallets

As we hear the word 'wallet', we remind our pocket wallets that we usually used to place money or other important things. As cryptocurrencies are not in the form of paper money or real coins instead they are in the form of digital assets that can never be touched or felt. So, a question arises in our minds related to this thing that where we can store our cryptocurrencies? The answer is that we can store our crypto assets in crypto wallets that play the same role in the crypto world as the pocket wallets play in the real world.

Crypto Wallets are the applications or websites that allow users to store their Bitcoins, Ethereum, DASH, and other cryptocurrencies. The users of Steemit are also in touch with a crypto wallet which is called Steem Wallet, where the Steemit currencies (Steem, Steem Dollar SBD, TRX ) are stored.

The purpose of crypto wallets is to store crypto assets safely. There are private and public keys in the crypto wallets that are used to make transactions and access the wallet respectively. The function of the public keys is to make transactions from one account to the other wallets while the private key is of unique significance because they are used to get access to the wallets. If someone lost the private keys of his crypto wallets then he would actually lose his access to the assets that are stored in that wallet. The crypto wallets are of two types.

Cold Wallets are those crypto wallets that work offline and are used to store the crypto assets safely. There are not linked with the internet for better security and privacy of the cryptos.
Hot Wallets is used to store the crypto assets online. The hot wallets work along with the internet and there are more chances of being hacked by hackers. If the hackers got access to the private keys due to the malware, then they can easily get access to the assets that are stored in that wallet.

Whenever someone wants to buy or sell his crypto assets then he transfers the crypto assets to the exchanges where those coins can be sold.

Crypto Exchanges

Crypto exchanges are the platforms, applications, or websites where cryptocurrencies can be traded. As there are markets in the real world to trade (sell or buy) the goods. Similarly, exchanges play the same role in the crypto world. The crypto assets are exchanges with each other in the exchanges and these exchanges are also used to buy the cryptocurrencies from the fiat currency. For example, one can buy Bitcoin by investing USDs in the crypto exchanges.

Crypto exchanges require accounts to perform their functions. If the password or key of an account is lost, unfortunately, then he can recover the password by using the e-mail or phone number which he used at the time of signing up the account.

Moreover, the crypto exchanges also require identity verifications through nationality cards, passports, or other personal documents so that in the case of any hurry, the desired person can be traced. The crypto exchanges are also of two types.

Centralized Exchanges are those crypto exchanges where the transactions are validated by the involvement of the central controlling units. The most popular centralized crypto exchange is the Binance exchange.
Decentralized Exchanges are those exchanges where there is no central authority to verify the transactions made on the exchanges. Examples are Pancakeswap, Uniswap, etc.

Comparison

Crypto wallets are used only for the storage of crypto assets to ensure the privacy and security of one's crypto assets. While on the other hand, the crypto exchanges are something different as the trade of the crypto coins can be done on the crypto exchanges. If someone wants to buy cryptocurrencies without being involved in the exchanges, then he has to contact a dealer. When both the seller and buyer are satisfied then they can exchange the currencies according to the exchange rates. As this is a complicated process so exchanges are the better way to trade the assets.

I think that both the crypto exchanges and the crypto wallets are of equal significance in the crypto world. No one can ignore the crypto wallets as well as exchanges to gain better through the volatility of the market of cryptocurrencies. High-level professional traders use crypto wallets to store their assets and transfer a few assets to the exchanges for trading purposes. This is because that although crypto exchanges can be used to store assets they are less secure than crypto wallets. So, I think that the crypto wallets and crypto exchanges are of equal importance to gain better as wallets are used to store the coins safely and exchanges are used to trade the coins and get profit.

(04)

Create an account on Binance and show screenshots of the process(if you already have Binance create an account on Poloniex)

Create an account on Crypto Wallet and show the screenshots of the process (eg: Trustwallet, Exodus, etc)

As I have already accounted on Binance and Poloniex exchanges. So, I am going to create an account on Trust Wallet which is one of the most popular crypto wallets used for the storage of different crypto assets. So, follow these steps to create the account on Trust Wallet.

First of all, open the App Store or Play Store and search Trust Wallet there. Then click on the Install option as mentioned in the above screenshot.

Then, your installation will start as shown in the screenshot above.

After the installation of the application, click on the Open option to open the application.

As the app opens, click on the Create a new wallet option.

Now accept the terms and conditions of the Trust Wallet by selecting the mentioned box in the above screenshot.

Now, click on the Continue option as mentioned above.

Then select the mentioned box to ensure that you accepted the fact that once the private key is lost, you can never get back.

Then, click on the Continue option which becomes below shaded.
After this step, you will be provided with 12 phrases in a given sequence. You have to copy and paste these phrases to some secure place. Because this is the only key to unlock the Trust Wallet.
Then, you have to put all of the given phrases according to the sequence which is provided to you before. I cannot show these steps due to security reasons.

After entering the correct arrangement of those 12 phrases, your account will be ready to use. Now, click on the Done option, as mentioned in the above screenshot.

You can see that the Trust Wallet account is ready to use. Now we can store our crypto assets safe and secure here.

So, these are some simple steps to create a Trust Wallet account.

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Conclusions

Cryptocurrency is the future of this world. Cryptocurrency is a digital asset that cannot be touched but can be used to perform marketing and to purchase all kinds of goods. Cryptocurrencies are much better than the traditional finance system in security, efficiency, affordability, and many more reasons. The cryptocurrencies like Bitcoin, Ethereum, and others are stored in the crypto wallets like Trust wallet and are traded(sold or bought) on crypto exchanges like Binance.