Published : 25 Dec 2022 6:54 AM GMT
| Updated : 2022-12-25T12:26:46+05:30
Priyanka Nath
A cryptocurrency is a digital currency, which is an alternative form of payment created using encryption algorithms. The use of encryption technologies means that cryptocurrencies function both as a currency and as a virtual accounting system. To use cryptocurrencies we need a cryptocurrency wallet. These wallets can be software that is a cloud-based service or is stored on your computer or on your mobile device. The wallets are the tool through which you store your encryption keys that confirm your identity and link to your cryptocurrency. The Indian government has recently expressed its concern regarding the use of cryptocurrency in the country. While the government has not taken any action against the use of cryptocurrency, it has expressed its apprehension that it may be used for money laundering and other illegal activities. The government has expressed its concern that cryptocurrency can be used as a medium of exchange outside the purview of the banking system, making it difficult to monitor and regulate. It is also feared that it can be used for terrorist financing and other criminal activities such as drug trafficking and hacking. The government has also expressed its apprehension that cryptocurrency can be used to bypass existing laws and regulations such as those related to taxation, foreign exchange and money laundering. It is also feared that it can be used to facilitate illicit transactions, such as corruption and fraud. The government has also highlighted the fact that cryptocurrency is not backed by any tangible assets, making it vulnerable to market fluctuations and manipulation. As a result, it may not be a reliable medium of exchange and could lead to financial losses for investors. In view of these concerns, the government has issued several warnings and advisories to the public against investing in cryptocurrency. In one sentence cryptocurrency is not centralized by the banks and government. There are thousands of cryptocurrencies. Some of the best-known include:
Bitcoin: Founded in 2009, Bitcoin was the first cryptocurrency and is still the most commonly traded.
The currency was developed by Satoshi Nakamoto – widely believed to be a pseudonym for an individual or group of people whose precise identity remains unknown.
Ethereum: Developed in 2015, Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin.
Litecoin: This currency is most similar to bitcoin but has moved more quickly to develop new innovations, including faster payments and processes to allow more transactions.
Ripple: Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to track different kinds of transactions, not just cryptocurrency. The company behind it has worked with various banks and financial institutions. Non-Bitcoin cryptocurrencies are collectively known as “altcoins” to distinguish them from the original.
Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into “blocks” and time stamped. It’s a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that’s hard for hackers to tamper with. In addition, transactions require a two-factor authentication process. For instance, you might be asked to
enter a username and password to start a transaction. Then, you might have to enter an authentication code sent via text to your personal cell phone. While securities are in place, that does not mean cryptocurrencies are un-hackable. Several high-dollar hacks have cost cryptocurrency start-ups heavily.
Hackers hit Coin check to the tune of $534 million and BitGrail for $195 million, making them two of the
biggest cryptocurrency hacks of 2018. Unlike government-backed money, the value of virtual currencies is driven entirely by supply and demand. This can create wild swings that produce significant gains for investors or big losses. And cryptocurrency investments are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds. One of the biggest challenges of cryptos is confidence. People and organizations are concerned about the authentication, authorization and/or confidentiality limitations of cryptocurrency transactions. Such limitations are currently hindering the adoption rate of cryptos. By standardizing the security techniques and methodologies used by cryptosystems around the globe, end-users will be able to make educated decisions more easily about which products and services to use and with which companies they wish to align. On the other hand, many cryptos, like Bitcoin, are not governed by a central control point or “authority”; standardizing security will be a challenging process. Standard approaches to a secure environment will come from the cryptos that adopt permission-ledger mechanisms such as Ripple XRP. In
permissioned-ledger environments, whilst read permissions may be public or restricted to an arbitrary extent, write permissions are kept centralized to one organization. As such, standardizing security is more achievable.
Today’s economies are all money economies because all economies have accepted certain currencies
(money) as a medium of exchange. The money supply causes inflation as well as deflation in economies by its excess supply and contraction in money supply, hence currencies of different countries
regulated by the government in order to combat inflation or deflation situations. Now a day’s many countries in the world have focused towards digital currency and transactions. Even someone doesn’t want to regulate their currencies and transactions. This brought greater innovation in the new currency that is a cryptocurrency, One of the most advanced, ambiguities, regulation-free currencies. In this article, I made an attempt to study Cryptocurrency and its development and transactions in India. In recent news, the government of India has been fearful of the bitcoin cryptocurrency.
However, many experts believe this is a baseless fear and that bitcoins can be helpful for governments.
For more guides to buying crypto visit a reputable cryptocurrency website. There are many reasons why the government may be afraid of Bitcoin and other cryptocurrencies. For one, cryptocurrencies are decentralized and not subject to government control. The government cannot easily track or regulate transactions made in cryptocurrencies. Finally, Bitcoin and other cryptocurrencies threaten the
traditional financial system. It could lead to a loss of control by the government over the economy.
Every coin has two sides. It is possible to get filthy rich by investing in cryptocurrency – but it is also very possible that we lose all of our money. Investing in crypto assets is risky, but can be a good investment if you do it properly and as part of a diversified portfolio. Cryptocurrency is a good investment if you want to gain direct exposure to the demand for digital currency. A safer but potentially less lucrative alternative is buying the stocks of companies with exposure to cryptocurrency.
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