Have you been too overwhelmed by the bombardment of aggressive cryptocurrency ads featuring popular Bollywood actors Ayushman Khurana and Ranvir Singh during the Indo-Pak T 20 game recently? Have you ever wondered what cryptocurrency is? Well, this article will just enlighten you on the latest fad in digital currency – cryptocurrency.
Cryptocurrency is there for everyone to use and understand that it is not that cryptic! It is a new form of virtual currency available in electronic form and has no physical manifestation such as paper money. Most people also consider cryptocurrency as an investment vehicle. According to a recent Times of India report, more than 10 Crore people own cryptocurrency. It is a generally acceptable digital currency and does not incur any manufacturing and storage costs like paper money.
Transfers are made through special software and applications. Transactions are faster and more secure. It is possible to directly transfer money from one person to another without any third party financial institution being involved. They are cryptographically secured by the public key, which is like the person’s account number and which is known to everyone; and a private key which functions as the signature of the person and which is known only to the account holder.
Although it has the advantage of being portable and resistant to inflation, it is vulnerable to the underlying infrastructure as it is encoded and distributed over a network of large numbers of computers. The integrity of transactional data is stored in chained blocks called Blockchains. These are online ledgers that keep all cryptocurrency transactions. Transactions cannot be tampered with because every node in the blockchain updates itself when a new transaction occurs.
Cryptocurrency can be purchased online through various crypto exchanges. Cryptocurrency is immune to government interference and manipulation because it is secured by cryptography. This form of currency is not regulated and therefore no central authority can access your funds. This form of currency that you don’t need to take out of your hip pocket wallet is mainly used for investments and illegal activities, including money laundering and tax evasion.
Today there are thousands of cryptocurrencies available, Bitcoin launched in 2013 is the most popular cryptocurrency. This currency appreciated fairly quickly in the market, growing over 300% last year. Unlike other currencies, cryptocurrencies are fixed in quantity and are designed to be scarce. For example, only 21 million Bitcoins are available. With increasing popularity, the demand for these Bitcoins is increasing and people are ready to buy them at a higher price thus increasing their value. Bitcoin accounts for around 47% of the total value of all cryptocurrencies available on the market, or more than $ 1.8 trillion. Other popular cryptocurrencies are Etherum, Litecoin, etc.
With more and more currencies introduced to the market and increasingly popular, many countries are making cryptocurrencies legal tender in their economies. In India, cryptocurrency is not considered legal tender, but trading in cryptocurrency is permitted.
A word of warning here! Cryptocurrency, like any other currency, is not immune to scams such as hijacking, commonly known as Cryptojacking. In January 2021, The Times of India reported a 9 crore Bitcoin scam, in which fraudsters hacked the accounts of people dealing in cryptocurrency through the Darknet. Scammers pretending to be crypto exchanges on the Internet, siphon money from investors. Since they are issued by private entities and have no government regulations, no legal recourse is possible in the event of such a scam. You should never give remote access to your computer and mobile to anyone if you invest in cryptocurrency. Always trade on safe and reliable crypto exchange platforms.
So with the world embracing cryptocurrency, I’m pretty sure businesses, governments, and investors will embrace it more and more and over time you will lose the feel of paper money between your fingers!
The opinions expressed above are those of the author.
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