So yup now even your money is digitalized ……
What is Cryptocurrency
It’s a new medium of exchange that has taken up the market, this digitalized form of currency has become a modern boon to society one can say, but this is not without consequences.
A cryptocurrency is an advanced or virtual cash that is made sure about by cryptography, which makes it almost difficult to fake or double spend. Numerous digital forms of money are decentralized systems dependent on blockchain technology—a chain of records authorized by a dissimilar system of PCs. A character that is the highlight of cryptographic forms of money is that they are by and large not having by any monetary position or value, rendering them hypothetically safe to government impedance or control.
Types of Cryptocurrency
There are 8 well-known forms of digital currency or cryptocurrency, them being bitcoin, Litecoin, Ethereum, Ripple, Bitcoin Cash, Ethereum Classic, Zcash (ZEC), Stellar Lumen.
- Bitcoin is considered to be the original cryptocurrency that was introduced in the year 2009.
- Litecoin: Litecoin was launched in 2011 as an alternative to Bitcoin. Like other cryptocurrencies, Litecoin is an open-source, global payment network that is completely decentralized.
- Ethereum: Created in 2015, Ethereum is a type of cryptocurrency that is an open-source platform based on blockchain technology.
- Ripple: was released in 2012 that acts as both a cryptocurrency and a digital payment network for financial transactions. It’s a global settlement network that is designed to create a fast, secure, and low-cost method of transferring money.
- Bitcoin Cash: is a type of digital currency that was created to improve certain features of Bitcoin.
- Ethereum Classic: is a version of the Ethereum blockchain. It runs smart contracts on a similar decentralized platform. Smart contracts are applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interface.
- Zcash is a digital currency that was built on the original Bitcoin codebase. Conceived by scientists at MIT, Johns Hopkins, and other respected academic and scientific institutions, it was built on a decentralized blockchain
- Stellar Lumen is an intermediary currency that facilitates currency exchange. Stellar allows a user to send any currency they own to someone else in a different currency.
The advantages of cryptocurrency:
Digital currencies hold the guarantee of making it simpler to move reserves legitimately between two groups, without the requirement for a believed outsider or a conventional third-party like a bank or credit card organization. These exchanges are rather made sure about by the utilization of open keys and private keys and various types of motivation frameworks, similar to Verification of Work or Evidence of Stake.
In the present-day day cryptocurrency frameworks, a user’s “wallet,” or record address, has an open key, while the private key is known uniquely to the proprietor and is utilized to sign exchanges. Reserve moves are finished with insignificant handling expenses, permitting clients to keep away from the lofty charges charged by banks and monetary establishments for wire moves.
Disadvantages of cryptocurrency
The semi-anonymous nature of digital currency exchanges makes them appropriate for a large group of criminal operations, for example, illegal tax avoidance and tax avoidance. Nonetheless, cryptographic money advocates regularly exceptionally esteem their secrecy, refusing the advantages of security like an assurance for informants or activists living under harsh governments. Some digital forms of money are more private than others.
Bitcoin, for example, is moderately helpless as a decision for directing an unlawful business on the web, since the legal examination of the Bitcoin blockchain has helped specialists to capture and indict lawbreakers. More protected and arranged form of currency do exist, be that as it may, for example, Run, Monero, or ZCash, which are unquestionably and progressively hard to follow.
Laws regulating cryptocurrency
Cryptocurrencies are not legal tender in India, and while exchanges are legal, the government has made it very difficult for them to operate. Though there is a slight confusion regarding the tax-related status of cryptocurrency.
Cryptocurrency transfer guidelines in India have become progressively harsh. While actually lawful, in April 2018 the Reserve Bank of India (RBI) restricted banks and any money-related establishments from “managing or settling though virtual monetary forms”. The broad guideline disallowed exchange of digital forms of money on residential trades – and gave existing trades until 6 July 2018 to slow down.
The Supreme Court spoke on this matter stating that “While we have recognized… the power of RBI to take preemptive action, we are testing in this part of the order the proportionality of such measure, for the determination of which RBI needs to show at least some semblance of any damage suffered by its regulated entities. But there is none.”
Though there are a number of aspects that are flawed in this modern-day form of currency called cryptocurrency, including the problem of it being lost forever if there is a malware breach or a major data loss or may it be the fact that people render it useless because of the fact that it essentially makes criminal transactions simpler and easier.
It is not without its perks, the transaction fees are nominal to nonexistent, there is a lesser chance for fraud, of course, it is a customer attraction and the immediate transfer of funds make it one of the fastest mediums for monetary transactions.
One could say that cryptocurrency like most of the modern-day innovations is both a bane and a boon. It is relatively new as an invention and has recently been propagated as the latest form of currency so it might take us a little longer to understand all the aspects of cryptocurrency.