CRYPTOCURRENCY, A PROMISING FUTURE OR JUST A FAD?
Crypto currency is something that everyone wants to talk about but very few have the idea about how it works.
Since human civilization has emerged, the currency has been a very crucial part of their lives. In the caveman era, they used to exchange their things which are famously termed as “barter system”. Suppose, Ram has seven mangoes and his friend has seven apples but Ram needs seven apples. What can Ram do now? He can exchange his goods with his friend via the barter system. But there were various flaws in barter system like lack of a common measure of value (seven apples may not have the same value as seven mangoes), lack of double coincidence of wants, unable to divide into smaller units etc.
After realizing that the barter system did not work very well, and thus currency went through a few recurrences in 110 BC; later “Currency” was coined officially. Thousands of 250 AD gold plated Florence was introduced which was only used in limited countries. From 1680-1980, the paper currency gained significant popularity and was used across the world. This is how modern currency came into existence.
Modern currency included paper currency, coins and credit cards and digital wallets like Amazon Pay, PhonePe and so on.
WHAT IS CRYPTO CURRENCY?
It is a new form of digital resource or virtual currency based on a network that is distributed across a huge number of devices.
The word “crypto currency” is derived from the encryption technique which is used to secure the end to end networks.
All the digital wallets (PhonePe, PayPal, Paytm etc.) are controlled by banks and governments. This means it is regulated by authorities and it may increase some hazards like a technical issue at the bank while transferring money, limited transaction and so on. This is why the future with currency lies with crypto currency. There are more than 1600 crypto currencies are available. Bitcoin, Litecoin, Ethereum, Z-cash are some popular ones.
PERKS OF CRYPTO CURRENCY:
- Self-governed and well organized.
- Payment can be processed within a few minutes.
- Authentication of users’ identity.
- Removes all the problems of modern banking.
- The unlimited fund can be transferred.
- Cost-effective mode of transaction.
- Decentralized and secure.
CRYPTO CURRENCY VS BITCOIN:
Bitcoin is also a digital currency that utilizes crypto currency and it is regulated by decentralized authority unlike government-issued currency whereas the crypto currency uses encryption technique which acts as an intermediate for the different financial transactions all over the world.
DRAWBACKS OF CRYPTO CURRENCY:
- There is no restriction to illegal transactions.
- More prone to hacks.
- Limited crypto currencies can be traded only in one or a few fiat currencies.
CRYPTOCURRENCY AND TODAY’S WOLRD:
The whole world is distinctly divided when it makes headway to crypto currency. On one side, there are supporters like Bill Gates, Richard Branson who believe that crypto currencies are better than regular. And on another side, people like Warren Buffet, Paul Krugman who are absolutely against the crypto currency. They both are Nobel Prize winners in Economics and they think it is a fraudulent investing scam and means for criminal activities.
It can be assumed that in the future there is going to be a conflict between regulation and anonymity as crypto currencies ensure that its users are kept anonymous. Despite having some disputes, the use of crypto currencies in the merchant’s navy is increasing, which carries a positive vibe.
By the year 2030, crypto currency would captivate 25% of national currencies which is a notable chunk of the globe and that would be a remarkable step in economical evolution.