The advent of the pool of technologies has led to the surplus development and progress of mankind. Earlier people used to do every task manually and this required effort and time. Gradually the trend started changing and the invention of machines and tools started changing our lifestyle. The scenario has greatly changed in the 21st century. The wave of digitalization has brought a revolutionary change in the lifestyle of human beings. These all would not have been possible without the invention of the technologies like internet and computers. Digital technologies have become more prevalent after the outbreak of the Covid-19 pandemic. The cryptocurrency that is stated as digital currency is a burning topic nowadays.
This topic is very important for the basis of competitive exams. The students of higher classes and colleges often get this topic in exams for writing essays and debates. I have provided an elaborated essay on this topic that contains the details of the topic. I think it might be helpful to all the students and readers in getting a precise idea about this topic.
1) Cryptocurrency is a form of virtual currency that can be used digitally.
2) Bitcoin, Dogecoin, Ripple, etc are some examples of cryptocurrency.
3) The records of cryptocurrencies are stored securely in Blockchain.
4) The first decentralized cryptocurrency “Bitcoin” was developed in 2009.
5) At present, there are more than 7000 cryptocurrencies in the world till November 2021.
6) Cryptocurrency is a cost-effective technology.
7) It also provides fast and highly secure transactions.
8) Cryptocurrency is a decentralized technology therefore people may have trust issues.
9) However, it is not considered as a legal tender across the world.
10) Countries like China, Turkey, Egypt, etc. have banned Crypto.
Cryptocurrency is an alternative means of exchange and the transactions of crypto are highly secured using cryptography. Crypto is electronic money or we can say that it is a type of virtual money. The power of governing or controlling the distribution of Cryptocurrency does not lie in the hands of the government or any single authority. It is a decentralized body shared over different networks. Crypto is widely accepted by people all around the globe.
Bitcoin, Litecoin, Ethereum, Namecoin, etc are some Cryptocurrencies. Among all, Bitcoin is more famous and is the first crypto developed by Satoshi Nakamoto (an anonymous personality) in 2009. You can make money from crypto by buying various crypto coins and then selling them when their market price increases. Another way is through crypto mining.
Unlike centralized online transactions, crypto offers a faster and more secure way of transaction over different parts of the world. It does not have the involvement of any third party and hence you need not pay extra charges. Each transaction in crypto is highly secured using the well-known Blockchain technology.
In many places, Crypto is not accepted as a legal tender. Since crypto transactions are hidden and there is no governing body, it is impossible to trace the case of fraud. It also does not save your transaction details therefore, the transaction is irreversible that is only one-way. Although, crypto is only for those who have the proper knowledge associated with it.
Introduction
Currency is regarded as means of exchange for goods and services and that differs in the different countries. It is stated as the money that we use and that is required by us to fulfill our different needs. The advancing technology has given rise to new types of currency and that is named cryptocurrency. It is a currency that is not available physically but it is a digital currency. It is new technology and thus an interesting topic for all. Let’s discuss this emerging technology, origin, advantages, and issues related to this form of currency in the essay below.
What is meant by Cryptocurrency?
We all are well aware of the term currency or money. It is stated as the basic requirement of the people for getting different goods and services. Money that we use for different purposes i.e. to buy different things, for investments, doing transactions, etc is in the physical form. A cryptocurrency is also a form of currency but it is not available in physical form. It is a newly developed currency that is an internet currency and can only be used digitally. In other words, cryptocurrency is a newly invented form of currency that is termed digital or virtual currency. Bitcoin, Ripple, Dogecoin, etc are some of the examples of cryptocurrencies.
Cryptocurrency is a set of binary data and that is used as a medium of exchange for goods and services. The record of every coin in cryptocurrency is being stored in the digital ledger cryptographically in a secure way so that no changes can be made in the transaction data. The people get the authority of the token according to the amount they have given for stake in cryptocurrency. It is stated as the centralized currency after it is issued by a single user. Later when it is stated as decentralized, its options are available on the digital ledger of every connected user in the blockchain. Bitcoin is referred to as the first decentralized cryptocurrency that was invented in the year 2009. There was the invention of different cryptocurrencies after the invention of Bitcoin.
History of Cryptocurrency
Classification of Cryptocurrency
The first developed decentralized cryptocurrency was Bitcoin. It has attained great popularity and is being used in the different nations of the world. The credit for the invention of this cryptocurrency goes to Satoshi Nakamoto in the year 2009. Various other cryptocurrencies have been designed after the emergence of Bitcoin and all are specific in their functions. There are more than 7000 cryptocurrencies in the world till November 2021. The other cryptocurrencies except Bitcoin are termed Altcoins. They are Litecoin, Peercoin, Namecoin, Ethereum, Cardano, etc. The expected value of all the existing cryptocurrencies is about 1.5 trillion dollars.
Advantages of Cryptocurrency
Issues linked with Cryptocurrency
Every technology is a blessing for mankind as it is benefitting us in different ways but there are some of the disadvantages also associated with it. The issues or disadvantages linked with the use of cryptocurrency are stated below:
Cryptocurrency in India
Increasing Trend of Cryptocurrency in the World
The advent of cryptocurrency is a great innovation in technology. The invention of the blockchain is the basis of the working of cryptocurrency. It is because of this technology that cryptocurrency is made decentralized. Bitcoin was the first decentralized cryptocurrency invented in the year 2009. Thereafter many such cryptocurrencies have evolved. In beginning, this innovation did not get any importance but is gaining more attention at present.
Although, there are many countries that have not encouraged its use but many of them have started taking interest in this digital currency. Recently, countries like Japan and Australia have made it a legal tender. Moreover, many investors and businessmen are taking interest in accelerating their businesses by using cryptocurrencies.
How does Cryptocurrency affect Society and the Economy?
The cryptocurrency or digital currency is gaining popularity at present. The data of transactions of the cryptocurrency is recorded and stored in the blocks of blockchain technology. The advent of cryptocurrency and its use in the future will be changing the mode of utilization of money by the people. The new ways will develop for the exchange of the currency for goods and services as it is a digital currency and is decentralized.
The use of cryptocurrency will result in making society a better one. It is because the transaction process in this system is more efficient and secure. This will help in reducing the errors, frauds, and cheating taking place in the transactions and paper works. The record of every transaction is available in the blocks and making changes or tampering of records is impossible. This in turn will also have a positive impact on the economy of the nation.
Future Scope of Cryptocurrency
The future of cryptocurrency totally depends upon the regulatory measures and framework given by different countries in the world. At present, there are certain challenges in operating this currency in different countries of the world. The most important issue is security and regulation and overcoming the challenges might help this form of currency to flourish in the future. Many people fear investing in such currencies that are not having any central authority for control. The people investing money in this are mainly with a motive of earning money. They do not prefer this technology for doing transactions and other works.
Blockchain technology has blocks of record linked together. Such technology can be devised in the banking and commercial sectors to know the details of every step of the transactions. This will help in reducing any kind of illegal transactions that are happening by the use of digital currency. Recently the finance minister of India has also stated that there will not be a complete ban on cryptocurrencies in the nation. Several studies and experiments will be conducted by the assigned people in the government to move forward in embracing this technology.
Conclusion
Cryptocurrency is well designed by using every modern technique like the internet and developed software. The invention of cryptocurrency has been greatly helpful in fostering digitalization. The control and management of cryptocurrency by the blockchains are encrypted and this is a boon for investors and businessmen. The countries have to make regulations to get more clarity about the use of cryptocurrencies and blockchains. The establishment of specific rules and guidelines by the government will aid in reducing the limitations of this wonderful technology. This will enable digital currency to become more eminent and successful in the world in the coming future. I have tried to provide the details of this topic in a very easy format.
I hope that all the students and readers will love reading the essay on Cryptocurrency and issues with it.
Read Also :
Ans. El Salvador was the first country in the world to accept Bitcoin as a legal tender.
Ans. Digital currency is the other name given to Cryptocurrency
Ans. BTC is the short form of the currency named Bitcoin.
Ans. Open-source software is used in making the cryptocurrency Bitcoin.
Ans. Ethereum is the most popular cryptocurrency after Bitcoin.
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