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 –

ADVANTAGES –

• 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.
• Secured
• Promotes privacy.

DISADVANTAGES –

• 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.

CRYPTOCURRENCY BILL

• 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.