“The future of money is digital currency” ~Bill Gates
Due to the fast advancement of data and communication, numerous maneuvers in our ordinary lifestyles have been incorporated online and they emerge as extra adaptable and efficacious. A tremendous improvement in the number of online customers has initiated virtual word ideas and made another business marvel which is a cryptocurrency to work with the monetary exercises like purchasing, selling and exchanging.
WHAT IS A CRYPTOCURRENCY?
Cryptocurrency is the name given to a framework that uses “cryptography” to permit the secure exchange and trade of computerised tokens in a conveyed and decentralised manner. These tokens can be exchanged at market rates for fiat monetary standards. Cryptocurrency represents important and impalpable items that are utilised electronically in diverse programmes and webworks like online social games, virtual universes and peer to peer networks. The utilisation of virtual money has gotten broad in an extensive variety of frameworks lately.
TYPES OF CRYPTOCURRENCIES
The first digital currency was Bitcoin, which started exchanging in January 2009. From that point forward, numerous other digital forms of money have been made utilizing similar advancements that Bitcoin presented, however changing a portion of the particular boundaries of their administering calculations. Eventually, a substitute to the bitcoin developed, gaining popularity with the name “altcoin”:
The term 'Altcoin' is made up of vocables: 'alt' and 'coin' where alt denotes 'alternative' and coin symbolises 'cryptocurrency'. Together they imply a type of cryptocurrency, which is a substitute to the digital Bitcoin. Many altcoins are built on the basic structure that Bitcoin provides. Therefore, most altcoins require a mining process that provides a secure and inexpensive way for users to crack blocks in peer to peer, solve difficult problems and execute web transactions. But Altcoins are very different from each other, even with a lot of overlapping features.
- Litecoin: Litecoin is a form of altcoin. You can buy things from individuals or institutions and use them to transfer funds between accounts. Great for simple, everyday transactions due to its general speed and transactions. Users work straightforwardly, without the need of a middle person like a bank, credit card organization, or instalment handling administration.
- Namecoin: Namecoin depends on the code of Bitcoin with extra usefulness based on top of it. Namecoin utilises a similar proof-of-work (PoW) harmony algorithm as Bitcoin. It was created to decentralize the foundation of the Internet and increase privacy and security.
- Ethereum: Ethereum is a blockchain stage with its cryptocurrency, called Ether (ETH) or Ethereum, along with its programming language, called Solidity. As a blockchain network, Ethereum is a decentralized public record for checking and recording exchanges. The organisation's clients can make, distribute, adapt, and use applications on the stage, and utilize its Ether digital currency as an instalment
- Electro-Optical System (EOS): EOS is a blockchain-based decentralized working set-up that is intended to create, host, and back secure, decentralized independent applications (dApps) and sharp agreements. Likewise, EOS hubs buy into a "constitution" that ties them, through the blockchain, to the principles and guidelines set out by the EOS.
HOW TO BUY CRYPTOCURRENCY?
According to estimates made by crypto.com, approximately 106 million people have invested in cryptocurrency from all over the world. After examining the fluctuation trends in crypto exchange platforms, the phase of robust growth came after a period of sharp increases in bitcoin prices. Tesla’s declaration that it had secured 1.5 billion U.S. dollars’ worth of the digital coin, as well as the Initial Public Offering (IPO) of the U.S.’ biggest crypto exchange, vigour mass interest. According to CoinMarketCap, as of May 30, 2021, the value of all the bitcoins in the world was $653 billion.
There are some popular exchange platforms like Kraken, Coinbase and Gemini where an individual can trade in cryptocurrencies. Many exchange platforms allow you to keep your investment in your account. Still, if you want to further secure your bitcoin, you can send them into a cryptocurrency wallet. A cryptocurrency wallet is a place to store your digital investments. There are a plethora of cryptocurrency wallets available, and all of them have different levels of security standards.
SAFETY AND THE CONCEPT OF BLOCKCHAIN
The use of digital currencies in diverse setups is spiking day by day which indicates that the trust of using them is increasing as well. According to various surveys, More than 48% of speculators believe that using virtual currency is trustworthy and they agreed that using it is safer than using real money.
Bitcoin is mostly considered safe because it is supported by a unique system called the Blockchain. Blockchain is an apportioned, rigid ledger in which transactions and assets are recorded. Compared to other financial fixtures, the blockchain has an improvised technology that relies on secure core concepts and cryptography. Blockchain uses myriads of volunteers who come to an agreement about validating transactions on the Bitcoin network using cryptography. This system makes it so complex that the transactions are generally irrevocable, and the data security of Bitcoin is strong.
IS CRYPTOCURRENCY LEGAL IN INDIA?
The answer to this is NOT certain. The Indian government still isn’t very positive about the growing popularity of cryptocurrencies. In 2018, RBI laid down a stringent step and banned these in India. Then again in 2020, the Supreme Court of India undo RBI’s ban. The Reserve Bank of India (RBI) has been continuously warning citizens of the risk associated with trade-in cryptocurrencies. While the government of the country hasn’t completely banned cryptocurrencies, but they haven’t even been initialising it. The coming days may disclose the direction in which the trade of digital currencies will lead in India.
SHOULD WE INVEST IN CRYPTOCURRENCIES?
Cryptographic money is an unimaginably speculative and unpredictable purchase. Purchasing shares of well-established organizations are considered safer than investing resources into digital currencies like Bitcoin. One can't arrive at an immediate resolution if putting resources into cryptocurrencies is a decent choice or not. Scams can be kept at bay by self-analysing the performance of the company.
HOW CAN USERS PROTECT THEMSELVES?
According to Journalist Arnon Grunberg, “the relative success of the bitcoin proves that money first and foremost depends on trust. Neither gold nor bonds are needed to back up a currency.” Before purchasing cryptocurrencies one can do a background check of the company offering cryptocurrency. Taking a note of these points can help prospect investor to secure their hard-earned money:
- Who are the owners of the company? Analysing the reputation of the company
- What are the investor backgrounds of the company? If the company has some well-known investors
- Analysing the prospectus issued by the company
It can be an arduous task to analyse the whole prospectus; the more comprehensive prospectus the more there are chances of a reliable purchase. But this cannot make sure if the currency will succeed as the nature of the market is uncertain. That’s an entirely discrete question, even veteran speculators sometimes fail. One high-profile crypto exchange became insolvent in 2014 after hackers knocked off hundreds of millions of dollars in bitcoins. Even after a lot of pros and cons one must not forget the more risk you take the more profits you earn.
FUTURE PROSPECTS: THE WAY FORWARD
Trust and certainty are significant components that should be looked forward to as far as utilising and exchanging Cryptocurrency are concerned. The prospects of Cryptocurrency is promising, disclosing more chances to bring positive changes and progress to the e-Business and e-Payment areas. With the quick advancement and improvement of innovation, cryptocurrency won't stop developing.