What is Cryptocurrency? And its benefits

Hello friends, do you want to know about cryptocurrency? what is cryptocurrency and what are the benefits of cryptocurrency? 

So friends, today I am going to tell you about cryptocurrency. I will issue my opinion whether it is right for you or not, So without wasting any time let's start -

We all know that the present era is the era of technological and innovation. These days, technological change is taking place in every field in the world. 

 Due to technological development, every field is becoming digital. Just like that one such innovation has occurred in the field of currency in the form of cryptocurrency. 

 It is true that every coin has two sides. So there are many benefits and also there are challenges in this context. Therefore before adopting it, emphasis should be given on strengthening it legally and protectively. The economy can be accelerated by taking advantage of the Cryptocurrency.

• What is Cryptocurrency:-
• The reason for the popularity of cryptocurrency:-
• Global state of cryptocurrency: -
• Thoughts on cryptocurrency in India:-
• Disadvantage of cryptocurrency:-
• Conclusion:-

What is Cryptocurrency

It is a digital currency, which can neither be seen nor touched. It be kept in a pocket like normal currency. Because it is not available in printed form. Due to its non-physical appearance it can be called as Virtual Currency 

It is such a currency which is made on the basis of computer algorithm. It can only be viewed and counted on the computer and paid. It is a independent currency i.e cannot be governed and regulated by any institution or government. It is also called decentralized currency

 The first cryptocurrency called Bitcoin was started in 2009, which was created by Santoshi Nakamoto of Japan. Currently more than 1500 cryptocurrencies are available in the market, which act as peer-to-peer electronic systems.

The reason for the popularity of cryptocurrency

 This question arises in everyone's mind that how cryptocurrency can be so popular. The following are the reason for this –

•It helps in maintaining privacy. Through this the pseudonym and identity are told in the transaction. In such a situation, highly sensitive people find it very appropriate for their privacy.

•The cost in its transaction seems to be very low. The cost is the same on any transaction, domestically or internationally. Third party certification is not required in the transactions done through it. In this way it saves both money and time.

•Many types of certificates are required for opening an account and transacting in a normal bank. Whereas in Cryptocurrency it is not required.

•The government has strict control over banking systems and international transactions. Whereas it provides a reliable and secure means of exchange of funds outside the direct control of the national banking system.

•Most cryptocurrencies are based on the open source method. The software codes of these platforms remain publicly available, so there is always a possibility of continuous improvement on the cryptocurrency platform.

•The Government has the right to seize bank accounts. Whereas in the case of cryptocurrency Government cannot do that . Thus, this currency is used as an effective alternative to avoid the government. Also demonetisation and devaluation of currency has no effect on it.

Global state of cryptocurrency

•Currently 21 million bitcoins are hidden in the internet network and new bitcoins are also coming. Today the value of each bitcoin is more than 40 lakhs, which makes it the most expensive currency in the world. Some experts have also referred to it as Goldersh.

•From the year 2014, Microsoft has started taking payments for its services in the form of bitcoins. Nicosia University of Cyprus has first accepted bitcoin as an students admission fee .

•In the year 2018, Marshall Islands in the Pacific Ocean has become the first country to recognize cryptocurrency as legal tender. In many countries, it is being seen as an option to get out of the economic crisis. Facebook launched digital coin 'Libra' in June 2019, which is controlled by the Libra Association and Calibra Wallet.

•Many countries of the world are trying to ensure its transparency and lawfulness. However many countries have banned it.

•Cryptocurrency facilitates exchange at a much faster and comparatively much lower exchange fee as compared to other known mechanisms. Which is its best advantage

•Due to the fact that cryptocurrency or virtual currency cannot be administered by any central system, this transaction makes the process of virtual currency very easy and decentralized.

•Cryptocurrency is a digital currency, in which there is very little chance of fraud. It is beneficial to invest in cryptocurrency when there is more money, because its prices rise very fast. Hence it is a good platform for investment.

•The cryptocurrency is protected in a digital wallet provided to the holder. Which has complete ownership i.e in this process there is no need to trust any third party.

•It is possible to exchange it at the global level easily due to the lack of cryptocurrency within the national boundaries. Then the absence of a central bank in the whole process makes it more accessible.

•There are many countries where there is no capital control i.e, it is not decided how much money can be sent out of the country and how much can be ordered. Therefore by purchasing cryptocurrency it can be easily sent out of the country and then can be converted into money.

•It is completely safe, it only requires keeping orthotics. Because such currency is based on blockchain.

Thoughts on cryptocurrency in India

The Indian government's approach has been restrictive and discouraging due to the high degree of uncertainty and risk in cryptocurrency. The Reserve Bank of India first issued a warning in this context in December 2013. Again in the year 2017, the Reserve Bank warned the public in this context.

According to RBI, cryptocurrency like bitcoin is not regulated by any monetary authority nor does it have any legal basis. There is a high probability of loss in its investment due to the large fluctuations in its values.

According to RBI there are economic, financial operational, law, customer protection and security related risks in the operation of cryptocurrency. The Reserve Bank has not given any authorization or license to any type of cryptocurrency. It means to say that in India it is not legal tender

In the budget speech of February 2018, the Finance Minister Arun Jaitley had talked about stopping the use of cryptocurrency. The ban on cryptocurrency and the drafts of the Official Digital Currency Bill, 2019, proposes that those who buy and sell cryptocurrencies in the country will face a jail term of 10 years.

Thus, there is a ban on all types of cryptocurrency in India, ie it has not been recognized. But still people are buying it illegally. Although it has not been recognized in India given its challenges.

But it can play an important role in promoting cashless economy and financial inclusion in India. But for this, the government will have to formulate a strict policy in terms of terror financing, money laundering, tax evasion, customer protection, etc.

Disadvantage of cryptocurrency

•The biggest disadvantage of cryptocurrency is that it has no physical existence. Because they cannot be printed, that means neither the currency notes can be printed nor any bank account or passbook can be issued.

•There is no such organization to control cryptocurrency. Which sometimes sees a huge jump in its value & sometimes a huge drop due to which it can be very risky to invest in it.

•Cryptocurrency can be used for illegal activities such as arms purchases, drug trade, terrorist activities, money laundering etc. as it is used between two people only.

•Many nations, companies and websites etc have not recognized it as a legal currency, ie lack of widespread acceptance of cryptocurrency puts a question mark on it.

•There is no provision for refund of exchange in this. It mens to say that if someone is paid by mistake then there is no chance of returning the money.

•There is no stable regulatory body responsible for controlling cryptocurrencies. Due to which its credibility always remains in doubt and it is a big reason for not attracting customers and investors.

•If a digital wallet related to it is lost, then there is a risk of drowning the entire money. Which again puts a question mark on the stability and reliability of this system.

•Due to the entire system of cryptocurrency being online, its security remains weak and there is a risk of getting hacked.

•Each bitcoin transaction consumes about 237 kWh of electricity and it emits about 92 kg of carbon per hour, i.e it is also environmentally hostile.

Conclusion

Dear readers, it can be said in this way that along with the benefits of any technology, it is natural to have some limitations and disadvantage. Cryptocurrency is a digital and decentralized currency. Therefore it is not possible to impose complete and permanent restrictions on it, but it can be adopted by controlling it legally.

In view of its upcoming importance, some nations and companies may also include it in their payment system. Businessmen profiting from these currencies also want that instead of imposing a complete ban on it, a clear law should be made and regulated.

In fact, their importance increases for the wider economy. Therefore the Government of India should consider it seriously. Friends, I believe that there is a need to encourage the Indian economy by strengthening the protective and legal side and regulating it.

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