Were you too overwhelmed with the aggressive cryptocurrency advertising blitz with popular Bollywood actors Ayushman Khurana and Ranvir Singh during the Indo-Pak T 20 Match recently? Ever wonder what cryptocurrency is? Well, this article will simply enlighten you on the latest digital currency craze - cryptocurrency.
Cryptocurrencies are here for everyone to use and understanding is not so cryptic! It is a novel form of virtual currency available in electronic form and does not have a physical manifestation like paper money. Most people also consider cryptocurrency as an investment instrument. According to a recent report by The Times of India, more than 10 million people own cryptocurrencies. It is a globally acceptable digital currency and does not incur 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 transfer money directly from one person to another without the involvement of third-party financial institutions. They are cryptographically protected by the public key, which is like the person's account number and is known to everyone; and a private key that functions as the person's signature and is only known 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 encrypted and distributed over a network of a large number of computers. The integrity of transactional data is stored in chained blocks known as Blockchains. These are online ledgers that keep all cryptocurrency transactions. Transactions cannot be forged as all nodes in the blockchain are updated when a new transaction occurs.
Cryptocurrencies can be purchased online through various cryptocurrency exchanges. The cryptocurrency is immune to government interference and manipulation as it is protected by cryptography. This form of currency is not regulated and therefore no central authority can have access to its funds. This form of currency that you don't need to take out of your hip pocket wallet is primarily used for illegal investments and activities, including money laundering and tax evasion.
Today there are thousands of cryptocurrencies available, Bitcoin launched in 2013, is the most popular cryptocurrency. This coin appreciated quite quickly in the market with a growth of over 300% in the last year. Unlike other currencies, cryptocurrencies have a fixed amount and are designed to be scarce. For example, there are only 21 million bitcoins available. With increasing popularity, the demand for these Bitcoins increases and people are willing to buy them at a higher price, thus increasing their value. Bitcoin accounts for about 47% of the total value of all cryptocurrencies available on the market, which exceeds $ 1.8 trillion. Other popular cryptocurrencies are Etherum, Litecoin, etc.
With the introduction of more currencies in the market and their popularity, many countries are converting cryptocurrencies into legal tender in their economies. In India, cryptocurrency is not considered a legal offer, however cryptocurrency trading is allowed.
A warning here! Cryptocurrency, like any other currency, is not immune from scams such as hijacking, popularly known as Cryptojacking. In January 2021, The Times of India reported on a 9 Crore Bitcoin scam, in which scammers hacked into the accounts of people who trade cryptocurrencies through the Darknet. Scammers posing as Crypto Exchanges on the Internet divert investors' money. Since they are issued by private entities and do not have any government regulation, no legal recourse is possible in case of such scam. You should never grant remote access to your computer and mobile device to anyone if you invest in cryptocurrencies. Always trade on safe and reliable crypto exchange platforms.
So, with the world embracing cryptocurrency, I'm pretty sure businesses, governments, and investors will adopt it more and more, and over time, you'll lose the feel of paper money between your fingers!
Disclaimer
The opinions expressed above are those of the author.
Views expressed above are the author's own.
