Essay on Cryptocurrency

Essay on Cryptocurrency

The RBI issued a circular dated April 6, 2018 banning the use of cryptocurrencies in trade and also ordered banks and other financial institutions not to conduct any transactions in virtual currencies. Unhappy with this decision, the Internet and Mobile Association of India challenged it in the Supreme Court. Hearing this petition against the RBI order, the Supreme Court on March 4, 2020 lifted the ban on the use of cryptocurrencies in trade and investment. It was only after this decision given by the Supreme Court that cryptocurrency and its related issues started spreading its footing in India as well. Currently there are more than 13000 cryptocurrencies in circulation in the world.

Short and long essays on cryptocurrency and related issues

Preface

Cryptocurrency refers to a specific type of digital currency. In which all information related to the transaction is encoded and kept safe in a decentralized database. Since it does not involve the intervention of any other trustworthy party (such as the central bank, authorities etc.), there is always fear in people's minds about its validity. In this, the transaction details given by the user are verified by blockchain technology. Its main objective is to make transactions without middlemen.

Some popular cryptocurrencies

As mentioned in the above statements there are more than 13000 cryptocurrencies in circulation at present, some of the main ones are as follows-

Bitcoin

Cradano

Litecoin

Ethereum

Ripple

Dogecoin, etc

Things to consider before investing in cryptocurrency

It is a volatile currency, due to which it carries a bit more risk. It is very important to understand and calculate these risks before investing.

A white paper related to cryptocurrencies is a must-read.

The team's track record related to cryptocurrency should be checked.

According to experts, if you want to invest in it, then you must always be prepared for losses.

Volume and liquidity of trading coins is important.

Social media activities can provide some good information. etc

conclusion

Every country with high human capital capacity is currently trying to reach the peak of digital revolution. If India uses its human capital, resources and expertise in the right way in this revolution, then it can lead this revolution as well as reach its pinnacle. So India needs to welcome blockchain technology and cryptocurrency with open heart because cryptocurrency and blockchain technology are definitely going to play an important role in the fourth industrial revolution.

Essay on Cryptocurrency – Long

Preface

The word cryptocurrency originates from the combination of two Latin words crypto and currency. The word crypto is derived from the word cryptography which means hidden and the word currency is derived from the word “karensia” which means rupee – money. In this way, the word cryptocurrency literally means, hidden money or digital money. Cryptocurrency is a type of digital currency that cannot be touched by a person. The first cryptocurrency came in the form of Bitcoin in 2008.

Benefits of Cryptocurrency

Cryptocurrency transactions do not require any other person/organization, so it can be bought and sold at a very low cost.

Its biggest advantage is its privacy, it keeps all the information confidential unless it is necessary.

It does not require any kind of identity card to join it.

It can be used from anywhere in the world without any additional charges.

Importance of Cryptocurrency

Being based on the blockchain system, corruption can be reduced by tracking the flow of money and details of transactions etc.

This process is completely internet based and powered by the same, due to which it takes only a nominal amount of time to complete.

With 3% of the nearly $100 trillion global economy going into the pockets of intermediaries such as payment gateways, credit cards and banks, the use of blockchain in this sector could save hundreds of billions of dollars.

Consequences of Cryptocurrencies

So far no country or central bank has recognized the cryptocurrency. Due to which the fear of price volatility is always there.

Its privacy may promote terrorism or other illegal activities.

It can have an adverse effect on the economy of any country, because the monetary policies of the government have no effect on it.

Due to the use of millions of computers, it requires a lot of energy. etc

Security of Cryptocurrencies

Cryptocurrency is built on blockchain technology, in which data is recorded in blocks and stamped on them.

It is extremely difficult for hackers to tamper with this network.

However, there are also some examples where these accounts were not tampered with, but they were also hacked.

Investment Process in Cryptocurrency

The process of investing in cryptocurrency is exactly the same as investing in stocks, which is as follows-

The first step is to open a brokerage account with a firm that allows you to invest in cryptocurrencies.

After this you have to deposit the money from your bank account to the brokerage account.

Now you can buy cryptocurrency using brokerage account funds.

After buying cryptocurrency you can sell it any day for profit or loss.

You can use the following websites to invest in cryptocurrencies-

blockfi

Coinbase

Bitcoin Era

Gemini

Robin Hood

eToro, etc

Cryptocurrency app

Investing in cryptocurrencies is not as easy as online transactions at banks. However, you can invest money in cryptocurrency very easily, because there are many apps for this process nowadays. Some of which are as follows-

WazirX

Unocoin

CoinDCX

CoinSwitch Kuber, etc

Cryptocurrency Investing Strategies

If you want to invest in cryptocurrency then you can invest in cryptocurrency by following any of the following strategies-

Average cost of Rs

Unbalanced portfolio

A balanced portfolio

Profit reinvestment

Fees involved in investing in cryptocurrencies

There are mainly three types of transaction fees involved in investing in cryptocurrencies, which are as follows-

 Exchange Fees

Network Fees

Wallet Fees

Digital currency launched by India

The increasing popularity of Bitcoin and other cryptocurrencies has forced all the financial institutions of the world to think about digital currency. Inspired by this, the Reserve Bank of India has also started a plan to bring a central bank digital currency by the end of this year.

Difference between digital currency and cryptocurrency

Digital currency

CBDC is a digital currency and the most important thing is that this currency is legally recognized by the central bank of the country in which it is issued, it is also recognized by the government of that country. Contactless payments are made through it.

Cryptocurrency

On the contrary, no government recognizes cryptocurrency, nor can the government of any country interfere in it. This currency is kept in a kind of digital wallet.

conclusion

Although it is true that the advent of cryptocurrencies may change more than expected in the future, trading may become faster and less expensive, but given some of the problems (such as privacy, price volatility, etc.) Too much dependence will not be good because allowing trade among such a large population without any control of a private currency can be a big challenge for the government. Therefore, the government should take steps based on the advice of experts keeping in mind both the opportunities available in the field of cryptocurrency and the future so that the public can benefit from it.

I hope that you will like the information that I have shared with you through this essay.

(Frequently Asked Questions on Cryptocurrency and its Related Issues)

Q.1 Which is the first cryptocurrency?

Answer- The first cryptocurrency is Bitcoin.

Q.2 Who is the creator of cryptocurrency?

Answer- Satoshi Nakamoto is considered to be the father of cryptocurrency.

Q.3 How many cryptocurrencies are there in total at the present time?

Answer- According to the data of 'CoinMarketCap' (a price tracking website), there are currently more than 13000 cryptocurrencies.

Q.4 Which country was the first to legally recognize cryptocurrency?

Answer- The first country to legalize cryptocurrency is El-Salvador (a country in Central America).

Q.5 What is the name of cryptocurrency created by Indians?

Answer- The name of the cryptocurrency created by Indians is Polygon.