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CRYPTOCURRENCY, BOON, OR A BANE? #casebusteranits

Explaining whether cryptocurrency is a boon or a bane in this world and future. #casebusteranits


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Pavan Kumar Manapuram

3 months ago | 3 min read
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Introduction

In this world “Money” has become the most important asset in a human's life. Technology is increasing day by day. But hard cash is hardly being used. The usage of digital money using Mobile payment apps like Phonepe, Google Pay, etc has become significant. Though the money transactions have gone mostly online, the security issues for money didn't stop. A lot of frauds, hacking is being done every single day. Keeping this in mind an unknown person has invented a new type of currency called “Cryptocurrency” way back in the past in the year 2009.

What is Cryptocurrency?

Cryptocurrency is a digital payment system that doesn't rely on banks. This is a customer-to-customer payment system where one can send money where ever he wants. The transactions, the value of assets are unknown and cannot be identified. The first cryptocurrency that was invented was “BITCOIN”. This wasn't a huge hit in the beginning but later it bloomed a lot. There are two terms that you have to understand in cryptocurrency. Those are blockchain and mining. A blockchain is a type of security system for Cryptocurrency. The information of the sender, receiver, address, and many other things is stored. It is not in one system or controlled by one person. It is digitally connected throughout the world and is anonymous. No one can hack or see details of it. Now, coming to mining, it is basically like mining precious metals. The total data will be synchronized in all the platforms and using this data a new cryptocurrency is produced. For example, when there is a lot of transactions being done in a crypto a new blockchain will be formed. From this new blockchain, legal miners ( anonymous self-miners) will create a new cryptocurrency. This will benefit the miners with some value of cryptos without investing. So, now coming to how cryptocurrency works. Simply it is like a trading platform. It generally gains value when the demand is greater than the supply. When people think about the value of a certain cryptocurrency say bitcoin is higher when they invest more. This increases the demand and its value increases. For example, the value of bitcoin at the beginning of its invention was very less around 10k-20k INR. Later people thought that the anonymous coins might be valued more in the future and invested in it. For the past 1-2 years, due to the pandemic usage of online trading platforms increased. People became aware and came to know the value of cryptocurrency as well. The demand for bitcoin rose and its value increased exponentially ( As bitcoin was the first and oldest crypto, most people invested in it). So, people, who invested in the past for fewer amounts of around 10k-20k INR for one bitcoin, due to high demand in the present it is around 30 lakhs INR for one bitcoin. The price also varies on several factors. Those are supply and demand, cost of production through mining, no of competing currencies, rewards issued to miners, other new developments, etc. Above are the most important factors that can influence the value of any cryptocurrency.

Is Cryptocurrency Boon or a Bane?

A lot of cryptocurrencies are created every day. Recently, India has announced native a cryptocurrency known as the “Digital Rupee”. “IC15” is an Indian cryptocurrency index that enables users to easily identify the changes in Cryptocurrency. One of the Central American countries “El Salvador” is the first country that started accepting crypto all over the country legally. Anything in the country can be bought with crypto. There are a lot of pros and also an equal amount of cons. While coming to the Pros. The primary advantage is that no scam or fraud can be done through crypto. Secondly, high returns can be attained within days. The third one is that as it is a non-centralized platform, no government can cut taxes. Coming to cons. The first one is that Governments all over the world are trying to make Crypto legal. This will start tax deductions from it. The Indian Government recently announced that after making crypto legal, a 30% tax will be levied. Second thing is, technology is advancing every day from which hackers will get easy access to this anonymous platform. Recently, in Japan, around $100million has been hacked and stolen which makes crypto unsafe in the coming days. Coming to the third one, in the future there will be a lack of crypto. So, miners will start taking the crypto's value instead of the blockchain. So, there are mostly disadvantages than advantages in crypto.

Conclusion

A lot of stakeholders are predicting that Cryptocurrency is going to have a drastic downfall. I'm concluding by saying that Cryptocurrency is going to be a bane rather than a boon.

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