Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don’t have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting Cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety. The first Cryptocurrency was Bitcoin, ;which was founded in 2009 -A remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.
When it was first launched, Bitcoin was intended to be a medium for daily transactions, making it possible to buy everything from a cup of coffee to a computer or even big-ticket items like real estate. That hasn’t quite materialized and, while the number of institutions accepting cryptocurrencies is growing, large transactions involving it are rare. Even so, it is possible to buy a wide variety of products from e-commerce websites using crypto. Here are some examples:
Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT&T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin, Shopify, Rakuten, and Home Depot also accept it.
Some luxury retailers accept crypto as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in return for Bitcoin.
Some car dealers — from mass-market brands to high-end luxury dealers — already accept Cryptocurrency as payment.
In April 2021, Swiss insurer AXA announced that it had begun accepting Bitcoin as a mode of payment for all its lines of insurance except life insurance (due to regulatory issues). Premier Shield Insurance, which sells home and auto insurance policies in the US, also accepts Bitcoin for premium payments.
El Salvador becomes the world’s first country to use crypto currency as a legal tender and many countries in USA are moving towards the same. The benefits of Cryptocurrency in the economy are as follows:
There is already an entire industry built around cryptocurrencies and it’s held by institutions dedicated to supervising all the digital coin exchanges taking place throughout the world. The rate at which the cryptocurrency industry is growing is earth-shattering and this can be confirmed by early adopters that became rich overnight and found opportunities to grow financially. Bitcoin, the most famous of these cryptocurrencies, has already permitted many people and companies to develop and flourish, while many also rely on trading as their source of income. The economy is slowly shifting to adapt to these needs and cryptocurrencies have a great potential in satisfying them.
More than a third of the world population does not have access to basic banking services that can help them out in case of a personal financial crisis – loans, checking accounts and the list can go on. These people that in most cases are already financially disadvantaged typically resort to doubtful and dangerous lending practices. The interest rate of these practices is anything but fair, which consequently leads to more instability among the people who requested the loan. This is where cryptocurrencies come in with their high volatility and ease-of-use.
There are now many apps and programs that facilitate the use of cryptocurrencies and bring them closer to the wider audience. An added benefit of cryptocurrency use is that it’s completely decentralized, so trading can be done freely across borders. The use of technology will facilitate a financial revolution that will leave everyone more financially connected, empowered and enabled.
Because cryptocurrencies and block chain don’t need an actual brick-andmortar building to exist, the costs associated with their transitioning are minimal. There is no need for employee wages, utility bills or rent to be paid, so these savings naturally morph into low transaction fees. This in turn encourages more and more people to trust these new financial tools and start transitioning, allowing for the global economy to be more closely intertwined. And depending on the broker you choose, you can even trade with no minimum deposit requirements – as offered by CryptoRocket, for example.
Since all blockchain and cryptocurrencies transactions are automated and digitized, they are all tracked in a distributed ledger. The best part about it is that it cannot be manipulated by either people or companies, which greatly diminishes the risk of fraud and corruption. This means that underdeveloped countries also have a greater chance of entering the financial transactions game and boost their own economy and social prospects. What’s more, citizens will be able to keep track of where state funds will be oriented and will thus have a say within their own political climate.
There’s never been a more prosperous time to do business than it is now, in the sense that blockchain technology and cryptocurrencies can help entrepreneurs receive payments in more currencies. BitPesa is one such company that helps business owners in Africa make financial transactions with European companies.
Increased cryptocurrency adoption is improving financial inclusion. In a country like India, where many people are under served by traditional financial institutions or unable to access their services, crypto finance enables them to make financial transactions quickly, cheaply and without judgment. Moreover, cryptocurrencies open up a new asset class for consumers to grow their wealth, as a form of investment.
India’s rising Internet usage and digital landscape has resulted in the popularity of cryptocurrencies growing in tandem among the masses. According to a recent report by block chain data platform Chainalysis, India ranks second in the world in terms of cryptocurrency adoption. As per various estimates, around 15 million Indians have invested in crypto-related assets to date, with a recent survey by consulting firm Kantar noting that a sixth of urban Indian residents own cryptocurrency.
Crypto investments in the country grew more than seven-fold from $923 million to nearly $6.6 billion between April 2020 and May 2021. These developments, along with increasing rural Internet penetration, are improving financial access in the country.
A recent PWC report says it is highly probable that the future of money in India will be a mix of centralized, decentralized, account-based and tokenbased models. This would take the form of Central Bank Digital Currencies, stable coins, and cryptocurrencies co-existing alongside traditional digital and physical currencies. Embracing cryptocurrencies will not only support India’s financial inclusion goal, but also lower the cost of processing transactions, make the world less dependent on cash, and increase the mobility of money across the globe.
For more than a decade, India has consistently been among the world’s largest recipients of remittances. As remittances often involve high fees and long waiting times for fund transfers, their operating model has key implications for developing countries like India. With their aforementioned benefits, cryptocurrencies offer a viable solution to make global remittances cheaper and faster.
India has a conducive environment to drive a crypto economy — large, tech savvy population comprising millennials and Generation Z, and an abundance of tech talent adept at working with block chain technology. This has spawned block chain startups and led to the development of new digital currencies, with the Reserve Bank of India expected to pilot its first digital currency by December of this year.
Young Indians aged 18 to 35 are also finding cryptocurrency a better investment option when compared to gold due to the ease of process — a fact borne out by recent World Gold Council data.
With India still grappling with Covid-19, the pandemic’s impact on the economy makes financial inclusion a priority as people and businesses pick up the pieces. In the coming decades, the country may well have a much more democratized and accessible financial system. I hope India has the foresight to give cryptocurrency the consideration it deserves, in formulating the country’s plans for financial inclusion and economic growth.
The anonymity of Bitcoin has always been an attractive tool for offenders and a challenge for financial regulators. There is a huge misconception that Bitcoins are transacted anonymously and no single record is kept. Bitcoin falls somewhere between the two extremes of anonymous and non-anonymous transactions. A more appropriate term to describe Bitcoin transactions can be “pseudo-anonymous” as it doesn’t reveal the identities of the parties involved in the transactions but keeps a complete transaction record on a distributed ledger that is open to public view. Currently, due to law enforcement concerns, the exchanges (Bitcoin banks) are limiting pseudo-anonymity by imposing certain policies. Similarly, a transaction containing a huge amount of Bitcoins can easily be tracked down. There are many legal and regulatory issues associated with Bitcoin’s adaptation, such as the status of private currency emerging as a strong competitor against national currency, currency posing risks or having a potential for criminal activities, and limitations upon a currency functioning without any depository institution.
Bitcoin becoming legal tender in El Salvador is another example of the asset’s accomplishments. In only 12 years of existence, a decentralized digital cash protocol created by an anonymous developer became a country’s official currency. Whether other territories follow suit in the near future remains to be seen, but this move presents an optimal opportunity to test the practical qualities of Bitcoin on the economic, cultural and socio-political levels of an entire nation.
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