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CRYPTOCURRENCY FOR RAS MAINS | PAPER 2

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.