Crypto-Currency

From social media memes fueling Dogecoin to the high level legal concerns whether to accept Cryptocurrency or not, all these speculations have made this digital asset a hot topic to talk about.

What makes these digital coins so vulnerable to a single tweet of Elon Musk that the value of the asset skyrockets as soon he tweets on it? More than 15 million Indians are buying and selling digital coins, such as Bitcoin, Dogecoin and that really shows how big this is going to be in this decade.

WHAT IS CRYPTO-CURRENCY?

Cryptocurrency is a form of a digital or virtual asset curated to work as a medium of exchange. It is a decentralized digital money unlike the traditional Indian currency which has a centralized control by the RBI. Currently there are more than 5000 different cryptocurrencies circulating in the market.

In simple words Cryptocurrencies are softwares created in digital phenomena, so the next time when you see the image of a bitcoin with the modified Baht Symbol embedded on it, don't get fooled that they are real. They are just in the virtual world designed by various softwares.

WHAT IS BLOCKCHAIN TECHNOLOGY?

The cryptocurrency primarily runs on the principle of blockchain technology. Any given blockchain consists of a single chain of discrete blocks of information, arranged in a particular sequence. The block stores information of transactions like who is the sender, reciever and how much the amount is transferred. They are connected in the form of a chain with each block having a reference number, and when you try to alter or hack a single block, the entire chain gets affected. This is the reason why it's considered one of the most secured technology. ADVANTAGES OF CRYPTOCURRENCY 👉Cryptocurrencies have very low transaction fees for International payments. 👉They don't have any middlemen involved, so the transactions are more transparent and safe. 👉 Acceptance of cryptocurrencies such as Bitcoin have grown exponentially over the years. The graph below shows the significant increase of the number of bitcoin wallets opened over the past few years.

DISADVANTAGES OF CRYPTO-CURRENCY 👉They can be used for illegal transactions as it is not possible for the government to trackdown the transaction histories because of the strong encryption of crptocurrencies. 👉The cryptocurrencies are decentralized, making them more vulnerable to manipulation of money supply. 👉Mining of cryptocurrencies requires a lot of power and electricity, thus posing a threat on the environment. FUTURE OF DIGITAL CURRENCY IN INDIA

While there are high chances that cryptocurrencies are going to have a strong face in the future, but the fact is that it might be not just crypto. Keeping the environmental impacts of cryptocurrencies in mind, there have been reports of RBI introducing a digital rupee in the future. Cryptocurrencies will remain in our lives in the form of investment options, but commenting immediately on its usage is unsure. While, the Government soon plans to introduce the Cryptocurrency Bill in India, which will further clarify the future of the currency.