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CRYPTOCURRENCY FOR RAS MAINS | PAPER 2
Published on December 8, 2021 by Abhishek Shekhawat |
Last Updated on March 14, 2023 by Abhishek Shekhawat
WHAT IS CRYPTOCURRENCY?
- It is a form of digital or virtual currency.
- It is an internet-based medium of exchange that for conducting financial transactions uses cryptographic functions.
- They are the system that allows secure payments online.
- They are built on the technology known as a blockchain, it is a decentralized technology that is spread across many computers that manage and records transactions.
- They are not issued by any central authority.
- They are derived from encryption techniques that are used to secure the network.
TYPES OF CRYPTOCURRENCIES –
- There are more than thousands of cryptocurrencies trading publicly all over the market.
- Bitcoin was the first blockchain-based cryptocurrency, launched in 2009 by Satoshi Nakamoto, it is the most valuable and popular among all.
- There are some competing cryptocurrencies known as altcoins, which include Solana, Ethereum, Litecoin, EOS, Cardano, Peercoin, Namecoin.
ADVANTAGES AND DISADVANTAGES OF CRYPTOCURRENCY –
- Easier to transfer funds, between two parties, without the need for a third party.
- There is a minimal processing fee, avoiding the extra fees charged by banks.
- Promotes privacy.
- Well suited for illegal activities.
- Absence of regulation.
- Highly volatile.
- The entire ecosystem is not secure.
HOW TO EARN CRYPTOCURRENCY?
- Through crypto exchangers like cash app, coin bases, etc., any investor can buy cryptocurrency.
- On November 29, 2021, the cryptocurrency and regulation of official digital currency bill is beginning on the agenda for winter session of the Indian government of the parliament.
- In the parliament, the crypto bill 2021 will be introduced to ban all the private cryptocurrencies in India.
- Reserve bank of India will issue the crypto bill which aims at creating facilitative framework for the creation of official digital currency.