Cyptocurrency : Digital Currency
Written By : Zeinab Sara
Since the inception of Bitcoin in early times, the popularity of cryptocurrency has grown rapidly. Many other new cryptocurrencies are launched since then and are widely used as a medium of exchange. Due to its popularity and usability, the price of bitcoin has already touched a vast range in recent years.
A cryptocurrency is a virtual or digital currency that is highly secured by cryptography or encryption techniques which makes it nearly impossible to counterfeit such cryptocurrency. These cryptocurrencies are designed to work as a medium of exchange. Cryptocurrencies are generally not issued by the government agency of any country. The decentralized nature of cryptocurrency networks shields it from any control of government regulatory bodies on it.
Bitcoin is the first type of cryptocurrency that presently remains the most used, valuable, and popular. After bitcoin, many other alternative cryptocurrencies with varying degrees of functions and specifications have been created. Bitcoin which is the most popular cryptocurrency was launched in 2009 by an individual or group known by the pseudonym “Satoshi Nakamoto”.
In the wake of the success of bitcoin, many other cryptocurrencies have been launched. Some of these cryptocurrencies are clones of forks of Bitcoin, while other are new cryptocurrencies built from scratch. These cryptocurrencies are known as “altcoins”. Ethereum, Solana, Litecoin, Cardano, Namecoin, etc are some other popular cryptocurrencies.
Through cryptocurrency funds transfer between two parties will be easy and there is no need of third party like credit/debit cards or banks. It can help save money and time for both the remitter and the receiver as it is conducted entirely on the internet. Cryptocurrency runs on a mechanism that involves very less transaction fees which makes it a cheaper alternative compared to other online transactions. As the payments are encrypted, they are safe and secured and offer and unprecedented level of anonymity.
As there is no regulation over cryptocurrencies, it is a possibility that cryptocurrency may be used for illegal activities such as money laundering, tax evasion, and possibly even terror-financing. Another disadvantage of cryptocurrencies is that they are not accepted everywhere.
Banning cryptocurrencies may result in an exodus of both talent and business from India. Also, blockchain and crypto experts might move to countries where crypto is regulated. A blanket ban on cryptocurrencies might also halt blockchain innovation which has uses in governance data economy and energy.
As the use and acceptability of cryptocurrencies are rapidly growing across the worlds, largest enterprises such as Tesla and Mastercard has adopted cryptocurrencies, a ban on cryptocurrency might deprive India, its entrepreneurs, and citizens of transformative technology.
As the cryptocurrency has its own advantages and disadvantages, regulation of cryptocurrency is needed to prevent serious problems to ensure that cryptocurrencies are not misused, and to protect unsuspecting investors from excessive market volatility and possible scams. However, regulation needs to be clear, transparent, coherent with a vision that makes investments and transaction in cryptocurrencies safe. Government should regulate the trading of cryptocurrencies by including stringent KYC norms, reporting and taxation.
