Were you too overwhelmed with the bombardment of aggressive cryptocurrency advertising featuring popular Bollywood actors Ayushman Khurana and Ranvir Singh during the Indo-Pak T 20 Match recently? Ever wondered what Cryptocurrency is? Well, this article will simply enlighten you about the latest digital currency fad – Cryptocurrency.
Cryptocurrency is here for everyone to use and understanding it is not so cryptic! It is a novel form of virtual currency available in electronic form and does not have a physical manifestation such as paper money. Most people consider Cryptocurrency as an investment instrument also. As per a recent The Times of India report, over 10 Crore people own Cryptocurrency. It is a globally acceptable digital currency and incurs no cost in manufacturing and storage like paper currency.
The transfers are done through special software and Applications. The transactions are faster and secure. It is possible to directly transfer money from one person to the other without any third party financial institutions being involved. They are cryptographically secured by the public key, which is like the Account Number of the person and is known to everyone; and a private key which works as the signature of the person and is known only to the account holder.
Though it has the advantage of being portable and resistant to inflation, it is vulnerable to the underlying infrastructure as it is encoded and distributed on a network of large numbers of computers. The integrity of the transactional data is stored in blocks that are chained together known as Blockchains. These are online ledgers that maintain all Cryptocurrency transactions. Transactions cannot be forged as 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 manipulations as it is secured by cryptography. This form of currency is unregulated and hence no central authority can have access to your funds. This form of currency which you need not pull out of your wallets from the hip pocket is primarily being used for investments and illegal activities including money laundering and tax evasion.
Today there are thousands of cryptocurrencies available, Bitcoin launched in the year 2013, is the most popular cryptocurrency. This currency appreciated pretty fast in the market growing over 300% in the last year. Unlike other currencies, cryptocurrencies are fixed in quantity and are so designed that they are scarce. For example, only 21 Million Bitcoins are available. With increasing popularity, demand for these Bitcoins increase and people are willing to buy them at a higher price thereby increasing their worth. Bitcoin represents approximately 47% of the total value of all the cryptocurrencies available in the market which is over $1.8 Trillion. Other popular Cryptocurrencies are Etherum, Litecoin etc.
With more currencies being introduced into the market and them becoming popular, many countries are making Cryptocurrencies a legal tender in their economies. In India Cryptocurrency is not considered a Legal Tender, however trading of cryptocurrency is allowed.
A word of caution here! Cryptocurrency like any other currency is not immune to scams such as Hijacking, popularly known as Cryptojacking. In January 2021, The Times of India reported a 9 Crore Bitcoin scam, where fraudsters hacked into the accounts of people dealing in Cryptocurrency through the Darknet. Fraudsters posing as Crypto Exchanges on the internet, siphon off investor’s money. Since they are issued by private entities and do not have any Government Regulation, no legal recourse is possible in case of any such 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 am pretty sure that businesses, Governments and investors will increasingly adopt it and with time you will lose the feel of paper money between your fingers!
Views expressed above are the author’s own.
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