Cryptocurrency – The Medium of the Generation
By Honey, Isha & Rinita
As humans have witnessed changes in their biological population over the successive generations, so has the concept of money. The world began with is called the Barter System i.e. exchange of goods for goods, but gradually its shortcomings like lack of double coincidence of wants, lack store of value etc. manifested a need for a new system of exchange. This led to the formation of the concept of money and since then it has taken several names and shapes which is represented in the following figure-
What is Cryptocurrency?
Very few people actually know about what all Cryptocurrency is and why it makes news frequently. Cryptocurrency is the newest medium of exchange which doesn’t have a physical presence, is entirely digitally operated, is secured by cryptography and works through a technology called a Blockchain.
Why do we need Cryptocurrency?
With less than 8% of the world’s currency in cash, the world has been transacting through cards, third party applications which in turn are centralized by banks and governments till now. But lately, a 100% performance or flexibility could not be achieved by these mediums. Even banks might hinder transactions in circumstances like-
● Customer’s account being blocked
● Transaction limit exceeded
● Technical issues at the bank, etc.
Why is Cryptocurrency deemed to be the future?
- There are either little or in some cases, no transaction costs
- Access is available 24/7
- Unlike banks, there aren’t any restrictions or limits on withdrawals
- Global transactions are now possible close to the speed of light
What are the best cryptocurrencies to invest in?
As of November 2021 there are more than 10,000 cryptocurrencies from around the globe which include-
- Bitcoin, circulated since 2009, is the most popular cryptocurrency, which is decentralized and can be used for peer-to-peer transactions without the need for intermediaries. Only 21 million bitcoins can be generated in all.
- Other than Bitcoin, there is Dogecoin, which was formed pretty much as a joke on social media, but is now considered to be an eminent investment prospect by many.
There are several other cryptocurrencies which are expected to rise in the future but for now Bitcoin, Ethereum, Litecoin, Cardano top the charts.
Why are cryptocurrencies considered alarming?
- A huge factor here is that cryptocurrency is highly volatile, and its value might fall or rise in seconds.
- Secondly, cryptocurrencies appear to have been involved in criminal or terrorist activities due to it not being decentralized or regulated.
Development of the Crypto-Currency
If we look into formation of the Cryptocurrency in the cyberspace or the digital world then it is rapidly growing in the current generation, especially in the developed countries like the United States of America, China, Japan, Russia etc. It has improved a lot in its financial status but along with this it also increased the users of cryptocurrency especially Bitcoin users. This is because it is easy to transact and also takes less time to process it under transaction.
There is data which proves that users of cryptocurrency are constantly rising as per the following data:-
- India- 100 million
- USA- 27 million
- Russia- 17 million
- Nigeria- 13 million
- Brazil- 10 million
From this data, one can observe that Indian people also use cryptocurrency currently. However, before 2018, using a cryptocurrency in India was illegal but this was changed and in March 2020, the Supreme Court has allowed to use cryptocurrency as legal tender.
This may cause people to stop using physical money like notes and coins altogether. This will help us save trees and the environment, proving to be eco-friendly. All transactions and payments will done through online mode only.
Now we’ll discuss some current and happening trends of the cryptocurrency…
Top 3 trends in Crypto-currency
1)Central Bank Digital Currencies(CBDCs)
As cryptocurrency is growing, so a possibility arises that in the future maybe the countries will create their own digital currency and start to use them as legal tender of the country. Another thing that can happen in the future is that the Central Bank may control the digital currency values due to its volatile nature. China is currently working towards creating its own digital Yuan currency. Similarly other countries like the USA, UK, Europe, etc. may attempt to do the same or keep tokenised money.
2) Crypto Tax
We have stated that the Central Bank may take control of the cryptocurrency in the future, so one must be ready to pay tax on this digital currency as well. This is because many countries are planning to implement it soon. Governments and the different organizations are working together to create tools to monitor the cryptocurrency transactions.
3)Crypto will go Viral
People may get encouraged to but cryptocurrency and therefore may invest more in it, making it a viral phenomenon across the nation’s population.
Fill the blanks with the suitable letters!
- Many digital platforms like Google Pay, PayPal use _______ which is quite useful for the public.
(Hint- _ _ Y _ _ O P _ _ M _ _ T )
- Cryptocurrency _____ used for peer-to-peer transactions without the need for intermediaries
(Hint- _ _ T _ _ I _)
- ______ is the future of Payment in finance
(Hint- C_ _t_ _ _ _a_k _ _ _ _ i_ _ l C_ _ _e _ _ _ _ _ )
- Central bank will take control of the Crypto-currency in the future, so be ready to pay tax on _____
(Hint : _ R _ _ T _ _ _ X)
- Number of users in India Crypto-currency ____
(Hint : _ _ _ _i _ _ion)
- Central Bank Digital Currencies(CBDCs)
- Crypto Tax
- 100 million
Hope you enjoyed our content! See you soon! Sayonara!