Cryptocurrency Lesson For High School Students
The way that cryptocurrency works is very simple, and it is sent the same way that people send money across the world through services such as PayPal. Transactions in the cryptocurrency world are overlooked by a big network of people instead of a third party or a middleman who will set rules or limits on the amount of money that can be spent in a day.
The term cryptocurrency has become popular in the last 20 years according to many custom writing services, and it is a virtual currency that is found in the digital world. The best thing about crypto is there is no government interference or any other authorities like banks.
Lauren Bradshaw, a pro essay writer from CustomWritings said, “while the avoidance of law officials looking over the shoulder of transactions sounds too good to be true, people forfeit certain privileges like protection when money is sent to the wrong people or the ability to put a stop to a payment”. This article will talk about cryptocurrency, its brief history as well as its benefits and drawbacks.
In 2008, the world went into a recession which caused chaos in the financial world and an author named Satoshi Nakamoto produced a paper that said digital transfers are the way forward. When 2009 came around, he mined his first block of Bitcoin, which changed the world as we know it today. In 2011, Namecoin and Litecoin were launched and began competing with each other.
Between 2011 and 2013, a few big companies started accepting bitcoin as a way to receive money. 2016 saw the launch of Ethereum, which also changed the market and made things like bitcoin very attractive. In 2017 the price of a cryptocurrency went up massively with Ripple gaining 36,000% while Bitcoin went up by 1,300%. 2019 saw the cryptocurrency reach $100 billion with over 2000 individual coins available for people on the market.
Notable differences between traditional currency and cryptocurrency
- When it comes to traditional currency, banks hold people’s money while in cryptocurrency, people hold their own money, giving them more control to do with it as they please.
- In traditional currency, government officials set out the rules which must be followed while in cryptocurrency there are no rules in place as computers are responsible for verifying transactions.
- In traditional currency, people have a limit when it comes to the amount of money they can send and receive per day. There are no such restrictions when it comes to cryptocurrencies, and one can make as many transfers as they want.
- Traditional currency heavily relies on government policies and banks to ensure people’s money isn’t stolen or lost. With cryptocurrency, people have to rely on themselves to ensure that their money isn’t lost or stolen.
- Traditional currency incurs some fees when one is transferred from one party to another, while in cryptocurrency, there are no transaction fees.
Advantages of cryptocurrency
1. Money transfer is easy
The best thing about cryptocurrencies is there are no intermediaries like banks for professional paper writing services and university or college students to deal with. They are not there to police any transactions made from one party to another, which makes moving money across borders quicker.
This is why many people across the world are turning to cryptocurrency rather than having money in the bank or other institutions because no credit card details are being exchanged. Everything is done via the use of private and public keys.
2. Faster transactions
Expanding on the point above, since the middlemen are not available to oversee any transactions, transfers are done quicker. When a person is about to get a loan from the bank, they have to provide pages of evidence including their financial statement to prove they are eligible for it and will be able to pay it back.
They even have to put things up as collateral, but when it comes to cryptocurrencies, there are no such concerns. Loans are executed in a matter of seconds and one can begin trading immediately.
3. Massive return on investment
The cryptocurrency market has been on the rise over the last 20 years, and it was worth almost $2 trillion at some point. In December 2021, in the crypto market, the value of Bitcoin stood at over $860 billion. If a person invests in this market, the possibility of earning massive results on their investment is very high. This is why people over the years have fallen in love with cryptocurrency.
Drawbacks of cryptocurrency
1. Digital footprint
Even though transactions are very fast and there are no third parties involved, one can league a digital footprint that can easily be invested by agencies like the FBI (Federal Bureau of investigation) if fraudulent activities are detected. It is not just the working-class people who use cryptocurrency, criminals use it too; however, it can easily be deciphered if foul play is detected.
2. Can be used for nefarious activities
Since it is used to move money around, it can be used by criminals to commit crimes such as selling drugs and money laundering on the dark web. With everything done digitally, a criminal organization can use the internet to send ransomware to unsuspecting victims.
One has to know that there are risks when it comes to online transactions and if one isn’t using a secure server, their wallet can easily be hacked and criminals can steal all their digital income. There have been reports over the years of millions of dollars’ worth of coins being stolen, disputing cryptocurrency being one of the most secure ways for transactions.
3. Constant price changes
Any cryptocurrencies that are traded on a public market experience constant crashes and rises in the process. It can be hard for people with less experience in this market to predict what will happen shortly.
There are so many videos out there that educate people about cryptocurrencies however, even if one is equipped with as much knowledge as possible, there is an element of risk with December 2017 seeing one of the biggest crashes the industry has seen. Bitcoin climbed to close to $18,000 only for it to crash to as low as $7,500 in a matter of months.
Overall, cryptocurrency is simply a digital asset that is shared on the internet and its existence cannot be controlled by financial institutions or the government. Several experts believe that the rise of blockchain will affect the law and finance industries in the future. As pointed out above, the major advantage of using cryptocurrency is it is a faster and cheaper way to send or receive money. The major disadvantages are the prices going up and down making it hard to predict if one is less experienced, plus it can be used by criminals to sell drugs or money laundering.