It’s no secret that people are currently obsessed with the use cryptocurrency. The public’s interest in cryptocurrencies is growing with each passing month, as the market continues to make headlines with its all-time high price.
A cryptocurrency is a digital asset designed to function as a means of exchange that employs powerful encryption to safeguard financial transactions, regulate the creation of new units, and verify asset transfers.
Unlike centralized digital currency and central banking systems, cryptocurrency uses decentralized control. Each cryptocurrency has decentralized governance thanks to distributed ledger technology, most often a blockchain, which acts as a public financial transaction database.
Bitcoin is widely regarded as the first decentralized cryptocurrency, having been released as open-source software in 2009. Over 4,000 altcoins (alternative variations of bitcoin or other cryptocurrencies) have been formed since the launch of Bitcoin.
What is the use of Cryptocurrency?
You’re already familiar with credit/debit cards, which “digitize” your dollars, pounds, or euros. However, there are a few benefits to adopting cryptocurrencies over traditional government-issued money.
- Transaction fees are low or non-existent. There are often little to no costs for core transactions because miners are simply awarded cryptocurrency from the network itself.
- Your digital key gives you exclusive access to your currencies. Unlike money held in a bank, the usage of cryptocurrencies cannot be restricted or frozen by anybody.
- When you pay with a credit or debit card, you’re giving up sensitive financial information that could be stolen or compromised. Cryptocurrency can be transmitted straight to a receiver without requiring any other information other than the exact amount to be sent.
- The Internet is accessible to billions of people, yet not everyone has access to banks or money exchange systems. Making or receiving electronic payments using cryptocurrency does not require the use of a bank or a line of credit.
Use of Cryptocurrency in India
For the past few years, cryptocurrencies have dominated the news related to the use of cryptocurrency in India. It’s the latest craze, and it’s a hot topic at practically every gathering. India currently has 15 cryptocurrency exchange platforms with a total of over 10 crore investors. In 2018, the Reserve Bank of India issued a circular prohibiting banks from transacting in cryptocurrencies. In 2020, the Supreme Court ruled it unlawful.
The Finance Bill was introduced in January during the parliament’s budget session 2022-23. The Finance Bill changed tax regulations to levy a 30% crypto tax on holdings and exchanges of digital assets. Aside from that, traders will not be able to credit their losses against earnings, and each trading pair would be treated separately for tax purposes. the government also implemented a 1% tax deduction at source (TDS) on each trade, stating that this would help them track finances. Exchange operators, on the other hand, have warned that the 1% TDS will deplete liquidity.
Let’s look at some of the factors that contribute to the increasing demand for cryptocurrencies.
- Easy money transfer between two parties without the need of a third party like a bank, a credit/debit card, or a wallet, for example.
- In comparison to internet transactions, this is a less expensive option.
- Payments that are safe, secure, and anonymous.
- Current cryptocurrency systems have a public and private key, as well as an account address or user wallet. The private key is only known by the wallet owner.
- Only the private and public keys can be used to access the account.
- Fees for financial transfers are kept to a minimum.
India has been a latecomer of the technological age at every stage same with the use of cryptocurrency in India. India is currently on the verge of the next phase of the digital revolution. Given that Blockchain and crypto assets will be a key component of the Fourth Industrial Revolution, India requires a vision that is clear, transparent, cohesive, and animated in order to achieve its goals.
Criminal Use of Cryptocurrency
The majority of people regard Bitcoin as a potential gold mine, while others understand the genuine worth of this cryptography-enabled technology and what it can provide to the world. However, anyone with a basic understanding of the technology, including criminal use of cryptocurrency, may take advantage of cryptocurrency anonymity.
However, there was always the possibility of abuse, which began to occur very quickly. On the internet, cryptocurrency-focused marketplaces popped up, with the cryptocurrency being used to buy illegal goods like drugs and guns.
This form of online trade exploded in popularity, allowing criminals to profit. A virtual currency that was intended to revolutionize the global economy quickly became a tool for criminal use of cryptocurrency. Things worsened when hackers began demanding Bitcoin ransoms, causing users to realize that Bitcoin had a nasty side.
Bottom lines
It’s a good point with an easy response to the use of cryptocurrency. We should adopt cryptocurrencies because they are a step in the right direction for global trade, as they allow everybody to participate.
Ignoring the concept of digital currency or cryptocurrencies on a decentralized network today is akin to ignoring the concept of the Internet in the early 1990s. People that understand this technology or can acquire a clear image of how it operates will quickly recognize the advantages and numerous applications.
Also Read: Is it legal to trade cryptocurrency in India?
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