What is a Cryptocurrency?
This time on Emerging Technologies, we will discuss cryptocurrency, also known as crypto. Typically, governments and central banks produce and regulate money. Humans consider money valuable because it can be exchanged for other commodities and services, such as food, housing, and clothing. Fundamentally, a currency's worth is intrinsic. Various national currencies have different values. This is because different currencies worldwide have varying supply and demand.
Cryptocurrency is comparable to fiat currency in many aspects. It can be traded, has worth, and can be exchanged for other items. However, cryptocurrencies like Bitcoin are not centrally governed or managed. Rather, distributed ledgers and blockchain technology control and manage cryptocurrency transactions. Furthermore, crypto is digital and not physical. People "mine" cryptocurrencies using computers. Furthermore, it is extremely secure and cannot be replicated by fraudsters.
According to experts, cryptocurrencies may fundamentally transform how we value and trade money. However, many individuals are apprehensive of the potential changes it may bring. Let's examine its advantages and disadvantages to understand why people favor or oppose its use.
Cryptocurrency is significantly more liquid and accessible than conventional currency because it only exists in digital form. Thus, we may transfer it across international borders in minutes. It can also be mined, traded, or transferred without needing a bank or stock exchange to function as an intermediary. Moreover, because of the absence of a central authority, cryptocurrencies are not taxed like traditional currencies. This deficiency also permits traders to take large risks and reap large profits.
Due to blockchain technology, cryptocurrencies are extremely private and safe. Each user has a unique numerical code that hackers cannot trace, and only they know how much currency they own. Also, because blockchain utilizes multiple computers worldwide, hackers can't access the currency and steal your data. Bitcoin is as secure as Fort Knox. Maybe even more.
While some belief cryptocurrencies' uncontrolled, high-risk character to be a benefit, it is frequently negative. A cryptocurrency's value can rise and fall in a few minutes. The Luna currency collapsed within minutes earlier this year, losing investors billions of dollars. In addition, while these crashes may be bad news for most investors, many high-volume investors frequently profit. This results in an upward flow of money, which encourages the wealthy to become even wealthier and exacerbates inequality.
As a bank or government does not guarantee cryptocurrencies, all transactions are irreversible, and nothing can be done in case of a scam. Additionally, if one loses their private cryptographic key, they risk losing all of their money. New bitcoin traders are significantly more prone to fraud, phishing, and financial loss.
Additionally, cryptocurrency harms the environment. Previously, we covered climate change in a blog article. Briefly, climate change is the alteration of global weather patterns caused by human activities, specifically the combustion of fossil fuels and deforestation. To mine cryptocurrency, a tremendously energy-intensive endeavor, large computer networks must operate 24 hours a day, seven days a week. Bitcoin mining consumes more electricity than certain countries on its own. This places an enormous burden on the world's energy resources, and we must burn more fossil fuels to meet these demands.
The blockchain and STEAM
STEAM students can better comprehend how technology is transforming the financial sector by studying cryptocurrencies. Similar to Artificial Intelligence and automation, bitcoin will significantly affect our work and trade, and governments will eventually pass more cryptocurrency-related regulations.
Matic Academy intends to introduce the future of education to learning, and cryptocurrencies will alter the future. We offer coding and robotics courses so that children can comprehend computing. From there, children can develop an interest in blockchain technologies and even non-fungible tokens (NFTs). We also provide DIY Kits for hands-on experience, and our STEAM Camps educate technological and practical skills. Register if you are interested in our camps! We also provide an online platform where children may learn through playing games and communicating with their peers for homeschooling.