A cryptocurrency is a type of digital or virtual currency, which is based on a network spread over a large number of networks. This is called blockchain technology. Cryptocurrencies are cryptographically secured, making it almost impossible to counterfeit digital coins. It is supposed to work as a medium of trading, in which individual property records are stored in a computerized database. Cryptocurrencies are generally not issued by a central authority and are mined using these blockchain technologies. The common man can also buy cryptocurrency using crypto exchanges just like he invests in the stock market. Over the past few years, the price of cryptocurrencies has skyrocketed despite their lack of recognition in many countries around the world, and has crypto enthusiasts dreaming of a future where these coins are legalized and used in day-to-day transaction systems.
Cryptocurrency markets operate like a regular stock market. For example, if a cryptocurrency named X introduces new features or sees an influx of money, its value increases. However, if a problem is detected in this X, its value will decrease. However, they are still little used in retail transactions and are used as popular trading instruments.
What is bitcoin?
Bitcoin is the most valuable cryptocurrency or cryptocurrency in the world, and is also the most famous among the thousands of cryptocurrencies that circle the market. It was created in 2008 by a group of people under the pseudonym of Satoshi Nakamoto. As of today, one unit of Bitcoin is valued at around $30,000, making it the most valuable cryptocurrency in the world. Introduced to the public in 2009, Bitcoin is the most traded cryptocurrency in the world.
Another popular cryptocurrency, which was introduced after Bitcoin, is Ethereum – commonly known as Ether. It is an “altcoin”, which is an alternative to Bitcoin, and is the second most popular cryptocurrency in the world. Solana, Cardano, XRP, Terra and USD Coin are some other examples of major cryptocurrencies around the world.
Cryptocurrency, digital currency and India’s position on them
“In India, the government has consistently invested in various reforms for greater financial inclusion. Over the past few years, initiatives such as Jan Dhan accounts, Aadhar-enabled payment systems, e-wallets, National Financial Switch (NFS) and others have reinforced the government’s resolve to stop using cash,” says the NCERT Handbook chapter that we mentioned earlier in this article. However, when it comes to cryptocurrencies, the situation is quite different. India does not recognize cryptocurrencies as legal tender and has taken a fairly strict view on the matter. The government this year introduced a new cryptocurrency tax on all gains from the sale of virtual digital assets, including cryptocurrencies. Therefore, cryptocurrency profits in India will now be taxed at 30% under the new law. Indian ministers including Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman, as well as the central bank, have repeatedly flagged the risks of unregulated cryptocurrencies. According to the ministers, cryptocurrency transactions are risky and can give rise to criminal activities, including money laundering and terrorist financing. The RBI on the other hand pointed to the role of cryptocurrency in reversing the economic situation in India.
The Reserve Bank of India on the other hand is in the process of introducing the Central Bank Digital Coin, which will be the first centrally controlled digital coin in India, thus indicating the country’s eminent move towards a digital future in terms of economy. . If all goes well, the digital rupee will launch in the financial year 2022-23, according to RBI estimates. Currently, only two countries accept cryptocurrencies as legal tender – El Salvador and the Central African Republic.
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