Published: 22nd Nov, 2021
Context
Amid a global surge in cryptocurrencies, the Union Finance Ministry has stated that it will make a decision on a state-issued cryptocurrency soon but ban all private cryptocurrencies.
About
What is Cryptocurrency?
- Cryptocurrency can be understood as decentralized digital money, based on blockchain technology.
- Simply put, cryptocurrency is a medium of exchange that is digital, encrypted, and decentralized.
- Some of the peculiar features of this currency are:
- Transfer of funds between two parties becomes more relaxed with a negligible processing fee.
- Makes use of blockchain technology to secure and encrypt transactions, whose database is highly secure and unalterable.
- Outside the ambit of governments and central banks of countries.
Regulation of cryptocurrency
- Unlike the U.S. Dollar or the Euro, there is no central authority that manages and maintains the value of a cryptocurrency.
- Instead, these tasks are broadly distributed among a cryptocurrency’s users via the internet.
- Bitcoin was the first cryptocurrency, first outlined in principle by Satoshi Nakamoto in a 2008 paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.”
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Blockchain
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Pros and cons of cryptocurrency
Positive points
- Bypassing fees and having privacy
- Good investment opportunity
- Less chance of hyperinflation
Negative Points
- Extreme volatile
- Uncertainty
- Security issue
- Taxable profits
- Less mobility of money
The concept of the digital rupee in India
About 100 million Indians own cryptocurrencies, according to a recent study. Top crypto exchanges serving the Indian market:
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- WazirX
- CoinDCX
- CoinSwitch Kuber
- ZebPay
- UnoCoin
- Legality:At the moment, no legislature covers cryptocurrencies in India. But this doesn't mean that owning cryptocurrencies is illegal.
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Important cryptocurrencies There are more than 14,000 cryptos in existence, and there are more being created every day. The more well-known, established cryptos, are as given below:
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