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Will cryptocurrency boom in the coming era?

Will cryptocurrency boom in the coming era?

Long before when money was not invented, there prevailed a system for exchange known as Batter System around 6000BC. This system of exchange was introduced by Mesopotamia Tribes and adopted by Phoenicians. According to the system, goods and services were exchanged in return for other goods and services. Slowly there was evolution and then came money as a medium of exchange.

What Is Cryptocurrency?Approximately around 600B.C, Europe was the first to manufacture coins to be used as currency. The concept of paper currency came up around 770B.C by the Chinese. All these forms of currencies are still being used, but the era is changing slowly. In the 21st century, other forms of currencies came up with various payment methods and investment criteria. A few of these are Google pay, Paytm, Investment in Banks, Investment in Big Projects, Investment in Shares in the Stock market, SRI (Socially Responsible Investing), Investment in Cryptocurrency etc.

How to easily split your bill with friends and family using Google Pay,  Paytm; A step-by-step guide | The Financial ExpressWith the changing trend, people are now much more prone to investment rather than keeping the money in the locker. Various investment schemes are also coming up. Among which cryptocurrency is the debatable one.

In the year 2018 Reserve Bank of India put banned cryptocurrency, i.e. Bitcoin. This ban was removed in the year 2020 by the Supreme Court. The Internet and Mobile Association of India (IAMAI) was the petitioner in this case on behalf of all the virtual currency trading companies. The court stated that trading through cryptocurrency is totally legal in India, and the investors are allowed to take the benefit arising out of that. China also banned cryptocurrency in the year 2017, after which there was a 6% fall in the currency, but the ban has been removed. Removing the ban by the court will ease the working of cryptocurrency, or the challenges will increase is the primary concern.

Bitcoin price drops as much as 15% days after recordThe basic idea that a layman gets after hearing the term cryptocurrency is that it is a digital currency. Thus, we can say cryptocurrency is the virtual or electronic form of currency that is based on the computer algorithm which uses the method of cryptography, i.e., the art of decoding.

The first cryptocurrency was launched in the year 2008 and named Bitcoin by Japanese engineer Satoshi Nakamoto. As of November 2019, there were over 18 million bitcoins in circulation with a total market value of around $146 billion. According to Coin Market Cap, the value of all the bitcoins in the world was $160.4 billion as of March 4, 2020. At present, there are various other forms of currencies such as Litecoin, Ripple, NEO and many more.

All of the above mention currencies use the technique of blockchain that secures the transaction from peer to peer transactions. A cryptocurrency has a ledger in which transactions are recorded, but this ledger is not owned by anybody.

If somebody wants to invest in cryptocurrency, the person will first purchase the coin. After buying, if he intends to spend, they will transact. The transaction remains unofficial and unconfirmed till the transaction is verified by the code sent to the person transacting.

Once the transaction is recorded, it is then verified by cryptocurrency miners. They use computers to resolve the verification process. Cryptocurrency Mining is open source so that anyone can confirm a transaction, and the first miner to solve the problem gets to add a block to their transaction ledger. This process is called the “proof-of-work system.”

After adding a block to the ledger, the miner is given a reward for their efforts, which varies based on the cryptocurrency.
Apart from this, if we look into the future aspect of cryptocurrency, then some of the current limitations of cryptocurrencies, such as the fact that one’s digital fortune can be erased by a computer crash or that a virtual vault can be ransacked by a hacker, may be overcome in time by technological advances. What will be more challenging to overcome is the basic paradox that cryptocurrencies face: the more popular they become, the more regulation and government scrutiny they are likely to face, eroding the fundamental premise for their existence.

Another is that of acceptance of it. Although the number of merchants who accept cryptocurrencies has steadily increased, they remain in the minority. There is also a need for technological improvement in its ecosystem. Bitcoin’s blockchain must be able to handle millions of transactions in a short period of time in order to be considered a viable investment asset or form of payment. Several technologies, including Lightning Network, promise scalability in their operations. New cryptocurrencies formed as a result of Bitcoin blockchain hard forks, such as Bitcoin Cash and Bitcoin Gold, aim to adjust the ecosystem’s parameters to handle more transactions at a faster pace.

In the previous year, during the lockdown, there has been a boom in cryptocurrency. The rapid expansion of global high-speed internet access and digitization has created an ideal environment for digital currency. Nonetheless, many people in India are unaware of the entire cryptocurrency scene. As a result, Coins witch Kuber has set out on a mission to educate and empower every Indian about cryptocurrencies and their potential via their learning centre Kuberverse.

Digital transformation technology strategy, digitization and digitalization  of business processes and data, optimize and automate operations, customer  Stock Photo - AlamyThe most popular cryptocurrency has become a highly valued asset in the year 2020. Bitcoin’s historical price has outperformed itself in value by more than 500 per cent in six months. Other cryptocurrencies, such as Ethereum, Ripple, Dogecoin, and others, have performed well. The cryptocurrency market is still in the midst of its longest bull run to date.

Another notable point is the levy of tax by the Indian government on the currency. The person investing in the cryptocurrency needs to pay thirty per cent tax out of the profit earned. After the levy of tax on it, various emerging markets have invested in it. Other concerns, such as positive regulatory mechanisms, are being worked out for proper law and transactions related to cryptocurrency. The Reserve Bank of India has also shown concern to launch the CBDC scheme, i.e. Central Bank Digital Currencies, as an alternative payment method.

Though in the initial years though cryptocurrency was growing at a low pace, but in the past two years, it has been a topic of interest among the people globally. There has been a sudden boom in the investment done in crypto. It has been a topic of concern for the government also. Thus, we can conclude that the future of cryptocurrency in the era of digitalization is bright.

Edited by Prakriti Arora

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