Cryptocurrency; its Scope and Potential.

 

Cryptocurrency in simple terms is digital money, the money we cannot see but will get the value of it when it is circulated through the internet. It is not country-specific nor does it have any issuing authority like the Reserve Bank in the case of India. It is a new concept of money transaction mainly used for wealth creation and transferring of funds.

 

This form of virtual exchange started only 13 years ago, from 2009 to be precise. When Satoshi Nakamoto introduced Bitcoin, the first entrant in the cryptocurrency market. By the year 2021, it is estimated 18.8 million bitcoins indicating the popularity it got within a short time. Now we have other virtual currencies in the market other than Bitcoin. Popular among them are Altcoins, Solanalifecoin, Ethereum, Cardano Biance, etc. but still, Bitcoin remains the favorite.

 

Problems with virtual currency.

Since it is not issued by any of the recognized authorities, it is not the regular mode of transaction. Many countries have not recognized it and the transactions remain illegal. For this reason, if there arise any issues or conflict; we cannot go to court. You will be pushed into the dark if there comes any disputes or legal settlements.

 

The second drawback it has is that it openly challenges the autonomy of the state. Hence its acceptance has created troubles for financial institutions and law enforcement agencies.

The third notable drawback is that we cannot use it freely as our normal currencies. Even most of the e-commerce sites which run their business through the internet are not accepting crypto to pay for their products.

 

Advantages

 

Even though it has three notable drawbacks; its popularity shows its advantage in crypto. The following are the benefits we may get by using virtual currency.

 

·       Money transfer becomes easier and more cost-effective. 

·       It has no transfer cost as it avoids intermediary banks for fund transfers.

·       Since it is not coming under the preview of government, many find it easy to transfer their assets from one place to another.

·       Many industrial houses prefer the transfer of funds through crypto as they can save huge transfer costs which they pay every year.

·       The major highlight is the security of the asset these cryptocurrencies provide. They are controlled by strong blockchain technology which is foolproof. It is impossible to break the security and your investment will remain safe.

 

Future of Cryptocurrency

 

From the days when it was considered pure gambling, this concept has traveled a lot. Now many countries are willing to accept the concept of digital currency although not in full.

 

·       El Salvador becomes the first country to accept bitcoin as its legal tender for monetary transactions.

 

·       Japan recognizes the investment in Bitcoin as legal property.

 

·       European Union released MiCA which means markets in crypto assets. It is a set of rules and regulations for those who wish to use it for fund transfers.

 

·       Bitcoin futures are available at Chicago Mercantile Exchanges

 

Investing in cryptocurrency

Since it’s a digital currency, we can also buy cryptocurrencies through mining. It can be purchased from cryptocurrency exchanges as well. Software is available and we need to download this software and can keep track of the assets and our transactions.

 

Now the concept of national boundaries becoming narrow and humans are becoming more cosmopolitan. Big industries are not interested to keep all their assets in a single country. They require diversification and do not wish to put all the eggs in a single basket. 

 

Furthermore, the use of the internet and acceptance of e-commerce is a welcome signal that this digital currency has a future and has the potential to become the popular legal tender in the days to come.

 

Cryptocurrency in India.

For the western world, India was always been a conservative country with a large number of regulations and beliefs. They believe it is not easy for any new concept to get root in India very easily. But the virtual currency proved it wrong. Now the government is also recognizing it through the union budget of 2022.  

 

Union budget 2022-23 proposed a 30 % tax on the transfer of any virtual asset. The tax bracket of 30 % is related to any business that has an element of gambling in it like casinos, lottery, betting, etc. Still, the investors in India are happy and satisfied. They feel it is the first step from the government in recognizing the concept called digital currency in India.