Crypto currency

A cryptocurrency is a form of payment that can be exchanged for goods and services online. Many companies issue their own currencies, often called tokens, and can be traded exclusively for a good or service provided by the company.

A cryptocurrency is a digital or virtual currency that is secured by cryptography, making it nearly impossible to counterfeit or double spend. Many cryptocurrencies are decentralized networks that have a distributed ledger implemented by a separate network of computers based on blockchain technology.

A defining characteristic of cryptocurrencies is that they are generally not issued by any central authority, which makes them theoretically immune from government interference or manipulation

Cryptocurrency is a type of currency that’s digital and decentralized. Cryptocurrencies can be used to buy and sell things, and their potential to store and grow value has also caught the eye of many investors.

There are thousands of different cryptocurrencies available today. The most popular and first cryptocurrency is Bitcoin, which was created in 2009. Other common cryptocurrencies include Ethereum, XRP, and Bitcoin Cash.


Unlike centralized electronic money and central banking systems, cryptocurrencies use decentralized control. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, which acts as a distributed ledger.

Transactions are sent between peers using software known as cryptocurrency wallets (for storing, sending, and receiving digital currency). The person doing the transaction uses the wallet software to transfer funds from one account to another. To transfer funds, it is necessary to know the password associated with the account. Transactions made between peers are encrypted and then transmitted over a network of cryptocurrencies.

Cryptocurrencies are digital and therefore cannot be counterfeited or arbitrarily reversed by the sender. Cryptocurrency uses a ‘push’ mechanism that allows the cryptocurrency holder to send exactly what he/she wants to the merchant or recipient without any information. Decentralization is one of the main advantages of cryptocurrency as it is managed by its own network and not by any central authority.

Cryptocurrencies are gaining popularity because they offer privacy protection, cost-effectiveness, low entry barriers that can be used as an alternative to banking systems and fiat currencies, open-source methodologies and public participation, and also immunity to government-led financial retaliation. Every transaction is transparent, autonomous, and secure.

Since the cryptocurrency is not bound by the exchange rates, transaction fees, or other charges of any country and hence it can be used internationally without any problems. Being paperless, it is eco-friendly. Anonymity is one of the biggest benefits provided by the cryptocurrency as one does not need to reveal their identity. Because of these benefits, cryptocurrency started gaining acceptance around the world.

Facebook has officially launched its virtual currency named ‘Libra’. It will be governed by the Libra Association, a Swiss group consisting of 28 members. It will run on a blockchain on which cryptocurrency payments take place.

Cryptocurrencies have their own associated risks. Most people have no idea how to use cryptocurrencies and hence are vulnerable to hacking. Cryptocurrencies are highly volatile in nature. The central issues are the lack of funds, which means there is no legal formal entity to give guarantees in any bankruptcy case.

There is no way to get a refund of the amount paid by someone by mistake. If a person has stored digital currency in his phone or computer, it is better to remember the password and not lose these devices. Losing your coin means that no one will be able to retrieve it.

Cryptocurrencies are being condemned in many countries due to their use in gray and black markets. There are two sets of interconnected risks, one for the development and expansion of these platforms in an uncertain policy environment and the other that these platforms pose a risk to the security of users and the state. They also have potential uses for illegal trade and criminal activities and can be used to finance terrorism.

India plays a relatively minor role in the global cryptocurrency market as it holds only 2% of the global cryptocurrency market capitalization. The Reserve Bank of India is monitoring the growing use of cryptocurrencies and issued an advisory in this regard in 2013, cautioning users, holders, and traders of virtual currencies about their potential financial, legal, and security risks. The Ministry of Finance also held a public consultation on regulating virtual currencies in May 2017.

In March 2020, the Supreme Court of India declared the RBI notification of April 2018, which had banned transactions through virtual currencies, as unconstitutional. This could lead to an increase in the use of cryptocurrencies in India.

If authorized as an electronic payment system or designated a legal instrument, cryptocurrencies will come under the purview of the RBI; Capital gains and business transactions would be liable to tax, and foreign payments would also come under the purview of the Foreign Exchange Management Act. Regulated cryptocurrencies will ensure strong consumer protection provisions.

The acceptability of cryptocurrencies as a legal instrument currently varies from country to country. While some laws and measures are in the process of being formulated, others are yet to respond to this disruptive change. Some countries like Algeria, Bolivia, Egypt, etc. have completely banned cryptocurrencies.

In other 15 countries like Bahrain, Bangladesh, China, etc an ‘implicit ban’ has been implemented. The Bank of Thailand announced plans to create its own cryptocurrency. UNICEF accepts cryptocurrency donations.