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Cryptocurrency is a form of digital money which is based on cryptography, the medium of converting legitimate information into an untraceable code for tracking the purchases or transferring something. The transactions are recorded in the digital public ledger which is called blockchain. In the simpler form, there are limited entries in the database and no one can change them without fulfilling the certain conditions or guidelines.Through cryptography, the transactions and ledgers are encrypted. However, Cryptocurrency was mainly originated during the Second World War. But, it has been prevalent due to the rise of Digital revolution whereas computer science has evolved drastically.
Though, the value of Cryptocurrency is not controlled by the Central Bank. The transactions of Cryptocurrency are anonymous and untraceable. Therefore, it is an open heaven for illegal transactions like drug trafficking etc. Anonymity is the main strength of Cryptocurrency. It can exchange hands from individuals to firms easily.
While there are many other Cryptocurrencies like Ether, Litecoin, Ripple. Bitcoin is one of them. Bitcoin is the digital money regulated without the Central Bank’s control. Anybody can participate in buying and trading of Bitcoins. Bitcoin was invented by a person named “Santoshi Nakamoto” in 2015. Bitcoin has no intermediary to regulate it. Though Bitcoin, you can buy your furniture and book rooms in hotels also.
Since 2017, the prices of Bitcoin are increasing in thousands. Bitcoin is widely used in the domestic and international community. The reason being of Bitcoin being famous is that there are no fees like a debit card or credit card fees for managing transactions. People can transfer bitcoins to each other through their computers and mobile apps too.
Bitcoins are stored in Digital Wallet. Digital Wallet functions like a Virtual Bank Account which gives permission to its users for sending and receiving bitcoins, making payments for goods and services and saving the excess bitcoins in the wallet. Bitcoin facilitates the buying and selling transactions in the private mode where there is very difficult to identify the names of buyers and sellers. Though, all the bitcoins are traded through their wallet id’s. The risk of illicit transactions through bitcoins is more obvious. Just have a look at the strategy for maintaining the database of cryptocurrencies. Bitcoin is one of the other cryptocurrencies which is full of peer networks. Every peer has a history of all the complete transactions and also the balance of every account attached to it.
is widely used in Bitcoin and other cryptocurrencies. It is not easy when you get into deep. The blockchain is a huge database which is being shared by the large community but not by the central authority like relying on a single entity i.e the Central Bank or the government. In Blockchain technology, each block is consist of some numbers of transactional records and chain binds them to work together for cohesion. When the transactional records are created, they are shared by the distributed network of computers and linked to the prior entry in the chain. This makes a chain of blocks or blockchain. However, the whole blockchain technology depends on the distributed network of computers. It is difficult to control the history which is protected by the layer of protection. It is not easier to temper the layer of protection due to its blockchain. Nobody can go back and change anything because it makes a public ledger.
IBM has built a smaller computer than a salt grain which can be used as a blockchain to fight against product frauds. It is useful for blockchain applications to track the shipment of goods and identifying fraud or any kind of theft.
RBI BAN ON CRYPTOCURRENCY
On 5th April 2018, the Reserve Bank of India barred banks and financial institutions from dealing in cryptocurrencies. In a statement, the regulator said, “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs (virtual currencies).”
In India, more than five million investors have bought or traded Bitcoin and other Cryptocurrencies. Since RBI has been strict, the companies dealing in Bitcoin and other cryptocurrencies have started to shift their offices outside India. Many exchanges have already been shifted to abroad. RBI has given 3 months to banks for winding up operations. Cryptocurrencies exchanges have been trying to settle their customers’ accounts before their exit from India. Though, Indian investors are still speculative about the future of Bitcoin or other cryptocurrencies because of its rising value day by day. Since RBI has a crackdown on the use of Cryptocurrency in India, the price of Bitcoin has decreased from Rs. 4.6 lakh to 3.5 lakh. While RBI is looking for some kind of digital currencies for cutting the cost of paperwork and making transactions more efficient and transparent. But, it will not completely replace paper currency like bank notes.
After the RBI’s notifications, there is a panic in the market among Bitcoin traders. Crypto-trading platforms like Unocoin and CoinSecure are trying to pacify the bitcoin investors. The co-founder of NUO, Mr. Varun Deshpande has said that “No bank or exchange in India can provide a way to convert Bitcoin into rupees flatly”.
As per the market analysis, millions of investors are attached to Bitcoin. They invested money in Bitcoin for the future financial growth. It is also true that investors have had significant growth in the trading of Bitcoins. Since Bitcoins were used for malicious activities too when most of the companies’ computers were hacked and bargained into Bitcoins. The intention of the Indian Government is very clear that the fraudulent and malicious activities are being done by the dishonest people for their financial gains. Bitcoin trading has been a big heaven for settling down black money which is the complete money laundering case. So, the government should make sincere efforts to resolve this issue on a priority basis because all the investors don’t have wrong intention to cheat the government and avoid tax. We hope that the corrective measures would be taken by the Government of India to protect the interest of Bitcoin investors.