Cryptocurrency: A boons and bane for India

Dr.Syed Ahtisham Raza Naqvi

sahtisham@gmail.com

8506077676

What is Cryptocurrency

Cryptocurrency is a virtual or digital currency. Cryptocurrency is secured by Cryptorography based on Blockchain Technology. Blockchain is a decentralized technology spread across multiple computers that manage and record transactions. Part of the appeal of this technology is its security. Which makes it almost impossible to counterfeit or double spend.

Uses of Cryptocurrencies

Cryptocurrency can be used as a medium of payment for online transactions (exchange for goods and services). You have to exchange your real currency for cryptocurrency in order to access a good or service. Many companies issue their own currencies, such as casino chips or tokens used in casinos. These tokens or chips are often used to transact the goods and services in which the company deals.

Types of Cryptocurrency

According to the market research website CoinMarketCap.com, there are 13,000+ different cryptocurrencies that are publicly traded. And cryptocurrencies continue to spread, raising funds through initial coin offerings, or ICOs.

Cryptocurrency	Market Capitalization
Bitcoin	$1.14 trillion
Ethereum	$505.4 billion
Binance Coin	$96.8 billion
Tether	$73.9 billion
Solana	$68.4 billion
Cardano	$62.9 billion
XRP	$51.8 billion
Polkadot	$40.3 billion
USD Coin	$34.4 billion
Dogecoin	$31.8 billion

Source CoinMarketCap as of 16 Nov 21

Key features of Cryptocurrencies

Anonymity/Privacy

The identity of the person doing the transaction is confidential, whether it is an individual or a company. and it is not possible to know their identity.

Irreversible

In the event of a transactional mistake or incorrect entry, we have no choice to rectify it as no entity or organization controls the crypto so where we will go to lodge our complaint.

fast transaction

The Cryptocurrency transfers are immediate and do not depend upon the location of the users. It is significantly different from the transfer of traditional currencies.

Blockchain technology

Blockchain is most simply defined as a decentralized, distributed ledger technology that records the provenance of a digital asset

Pros & Cons of Cryptocurrency

Pros	Cons
1. Transactions The transactions of cryptocurrencies take place over a peer-to-peer networking structure. This standard practice is "cutting out the middle man" and establishing more clarity in audit trails, The parties involved in the transaction know who they are	1. Illegal transactions In case of any illegal transaction, it is very difficult for the government to monitor or trace this encrypted data of the user. There are many examples where illegal transactions were done with cryptocurrency. Due to this, it has become easy to hide black money.
2. Easy and cost-effective to Trade & Transfer Cryptocurrencies have always positioned themselves as an optimal solution for transactions (international or domestic). With a rapid verification process using the peer-to-peer mechanism of blockchain technology, cross-border transfers and transactions can be carried out without complications on currency exchange fluctuations. Cryptocurrencies by their nature are not subject to exchange rates, interest rates, transaction fees, or other fees imposed by a specific country.	2.No refund or cancellation If someone accidentally enters the wrong credentials during the transaction of cryptocurrency, the coin cannot be recovered. Since there is no refund, in that case, you will lose your hard-earned money
3. Decentralized Unlike traditional currencies controlled by governments, cryptocurrencies are decentralized in nature. This decentralization breaks the monopoly and no individual or organization determines the flow of money and makes it stable and secure.	3. Energy consuming The process of crypto mining consumes a lot of energy as it requires advanced computers and these computers consume a lot of energy.
4. Privacy and Security Encryption technologies (Blockchain) are used for better security and privacy of the cryptocurrency. Blockchain provides a shield against ledger fraud and account tampering. It depends on random mathematical puzzles, these puzzles are very hard to solve.	4. Acceptability Despite the popularity of cryptocurrency, only a few countries accepted it as legal tender.

Active currencies by date of introduction

Data Source Wikipedia

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