Cryptocurrency refers to a digital currency which uses the technique of encryption to secure and verify the transaction of assets/funds and regulate the creation of new units of currency. Bitcoin was the first blockchain whose creator is still unknown to the world. The idea was published online in 2008 but it was actually in 2013-2015 that Bitcoin’s popularity surged. Apart from Bitcoin, Altcoins, Ethereum, Ripple and Tokens are also frequently used as cryptocurrency. Each has its own process of creation and distribution, and some use blockchain technology.
The present market capitalisation of Bitcoin is around $144 billion which has fallen from $200 billion at the end of 2017. There are roughly 17 million BTC in circulation. The price of single coin has fallen from $17,000 to around $8400. The CME group, an American financial market company in November 2017 launched Bitcoin Futures seeing the growing interest and evolving trend of the cryptocurrency. The value of Bitcoin rose to a record high after the announcement. There are many reasons for Bitcoin’s popularity; primary ones being its decentralised nature, anonymity and transparency, minimal transaction fees, and broad application in various industries.
However, despite the striking success of the Bitcoin, it faces many challenges. The opponents of Bitcoin fear that the cryptocurrency will destabilise the real economy. Many countries have banned the Bitcoin like Bolivia, Vietnam, Ecuador, etc. and those who use it like Tesla, Starbucks, etc. convert it to real currency with the help of a third party. It has also not been able to resolve scalability and volatility issues. It’s difficult to use for those who are not familiar with technology. Bitcoin still holds the top position in the cryptocurrency market with respect to market capitalization, user base and popularity. It needs to overcome the challenges to keep growing and marking a permanent place in the market.
In today’s world everything is getting digitalized even global economy is getting transformed into digital, we use credit debit card to make payments. With the growing technology and changing lifestyle crypto currency will become mode of payment and our traditional currency will completely phase out. Crypto currency is nothing but and digital/virtual money issued by a private entity and it at presently it does not have any government control, as a result its very unstable. Due to highly volatile prices makes it very attractive for the investors to invest in cryptocurrencies.
Payment using cryptocurrency are made peer to peer it eliminate middle man to make any financial transition, as result transaction are faster and cost of transaction is also very less compare to traditional transfer. Using cryptocurrency, one can make payment to anyone to any corner of the world instantly without any delay as there is no exchange of currency involved. Values of cryptocurrency all over the world remains same, banks are not involved in transaction so there is no middleman. One can transfer any amount, even government cannot freeze cryptocurrency or tax on cryptocurrency.
Cryptocurrency works in form of block chain. Information is digitally store in a computer network and it maintain record of each transition as a result it is very easy to know the exact value of cryptocurrency an individual hold.
As these currencies are controlled by private entities. No one can predict when a cryptocurrency will disappear from the market. With the rising rate of cyber-crime no one knows how safe these currencies are. These currencies work in the form of block chain which makes these currencies safe from cyber theft. But there are many serious drawbacks for these currencies, as these currencies are stored in a digital valet and payment are made online without any paper trail like traditional currency which makes these currencies more venerable for illicit trade. Even money can be laundered using these currencies & it might be difficult to trace the money launderer by the regulatory authorities.
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