As we strongly believe in PaGaLGuY, that a topic should not be debated without knowing the subject. Therefore two things are very essential to be known here:
- What is crypto/digital currency?
- How is it different from the other currencies, which can be traded in different markets or in different countries?
What is Crypto Currency?
Digital currency or crypto currency is computerized or virtual money that utilizes cryptography to create, verify, make and control of its exchanges. In contrast to conventional monetary forms, which are issued by national banks, the digital currency has no regulatory body at the center.
Bitcoin is the first cryptographic currency which was branded heavily and then was released into global markets in 2009. Following this various other digital forms of currencies, for example, Ethereum, Ripple, Litecoin, Cardano and so forth came into existence and are still operating in different markets across the world.
How is it different?
Digital currency can be traded for different monetary standards, items, and administrations. Lately, Economists, Central Bankers and Monetary Experts have communicated their reservations on the eventual fate of this money. Financial specialists and Enthusiasts of this money are anyway bullish.
Other currencies, like Indian rupee can be traded through NSE (National Stock exchange) or BSE (Bombay stock exchange), where the companies are listed and the NSE or BSE will regulate the companies listed within them. They ensure that the organizations listed are fair and the interest of the investor is preserved.
In the similar way, all the transactions that happen in the businesses and other regular exchanges between individuals is highly regulated by Reserve bank of India. Therefore, off late many unethical transaction and practices that were done by miscreants using the PayTm app was unearthed and were penalized heavily, which made KYC a compulsion to transact through this application.
However, due to the absence of the regulatory bodies for crypto currency, it is difficult to track the money invested, but the growth when compared to regular trading currencies is humongous and is therefore seeks attention of only money minded investors to go for the higher risk.
Important facts and numbers:
The University of Cambridge, in coordination with Judge Coordination school, came up with the important numbers and elements that would decide the further fate of the crypto currency market. Here are the few to be noted:
- While nations, for example, the United States, Canada, Australia, Japan and so on permit exchange and interests in cryptographic forms of money; there are nations, for example, Iceland, Vietnam, Kyrgyzstan and Bolivia where digital forms of money are completely restricted.
- At least 1,876 individuals are working all day in the digital money industry, and the real all out figure is likely well over two thousand as substantial mining associations and different associations that did not give headcount figures are included.
- The absolute digital currency showcase capitalization expanded more than three times, since mid-2016, coming to almost USD 25 billion in March 2017
- Bitcoin is the most generally bolstered digital currency among trades, wallets and installment organizations. The main digital forms of money are Ethereum, Bitcoin Cash, Litecoin, Ripple and Iota.
- The current number of extraordinary dynamic clients of digital currencies’ wallets is assessed to be between 2.9 million and 5.8 million
- Vanuatu, a Pacific Island Nation, situated in the South Pacific Ocean turned into the principal country to acknowledge Bitcoin in Exchange for as installment for its citizenship program.
How does a Crypto Currency work?
The innovation behind Crypto working is Blockchain. A blockchain is an open record that tracks all earlier bitcoin exchanges. These information units utilize cryptographic approval to connect themselves together. The whole system is utilized to screen and confirm both the making of local tokens through mining, and the exchange of tokens/coins between clients/end users.
- Crypto currency can’t be controlled by governments and regulatory bodies of any nation. Additionally as a result of its decentralized nature it is inflation proof
- While venturing to the far corners of the planet, there will no obstacle of trading our monetary standards with nearby monetary forms.
- Banks do charge us a piece of the cash we send or get. With cryptographic money, go between like banks will be disposed of, henceforth there will be no misfortune to us in budgetary exchanges.
- These exchanges can be checked. Each coin is appointed a novel number.
- One of the top economies of the world, Japan formally considers Bitcoin as acceptable currency for transactions.
- Unlike bank exchanges, Crypto exchanges are totally anonymous. An individual can just know the addresses of crypto on which the installment has been sent and gotten. Be that as it may, to whom these addresses have a place can’t be distinguished. This namelessness includes offers security against extortion and data fraud
- Due to sensational ascent in its prevalence among the majority it is increasing wide acknowledgment as a new mode for payments
- The additional charges for crypto currency exchanges is generally low when contrasted with other advanced exchanges, for example, credit cards, debit cards, NEFT, IMPS etc.
- The component behind crypto currency development is very intricate which counteracts duplication or making of phony cash. This makes its mocking very difficult
- Future has a place with innovation. Digital currencies make distributed money related exchanges significantly simpler. This cash can be sent from any piece of the world to any piece of the world. Thus there will be no battle of trading the monetary standards like Dollar to Rupee and so on.
- A very unpredictable nature, colossal value change over a brief period, of crypto suggests a genuine conversation starter to think about it as future cash.
- With administration of various nations having diverse frames of mind towards considering cryptographic money as a legitimate delicate, individual’s unconscious of its component believe it to be a dangerous venture.
- The unknown nature of crypto exchange pulls in its utilization for unlawful and illegal exercises, for example, tax avoidance, weapons acquirement, betting and so on.
- Crypto exchanges are irreversible in nature. Assets sent to a wrong location can’t be followed back and result in loss of all the exchanged cash.
- If the capacity gadget in which cryptographic forms of money are put away gets harmed or lost. At that point the lost Bitcoins can’t be recouped using any and all means.
- Cases of web based hacking of crypto trades, for example, Mt. Gox in Japan, Bitfloormake and so on make it increasingly dangerous.
- There will be no suspicion that all is well and good. We can’t rest gently on the grounds that the digital currency’s esteem continues fluctuating. Standard monetary forms vary as well, yet not as very as digital forms of money.
- If estimation of standard money falls, we can even now bear to live in our nation, in light of the fact that the fall of cash esteem impacts all fields. For instance, if the costs of basic needs rise, so does our pay rates. Be that as it may, if the estimation of digital forms of money like bitcoin falls, we will free our well-deserved cash.
- Bitcoin, the most punctual digital money will produces just 21 million coins. That implies when the interest for the bitcoin is more, the estimation of the bitcoin will increments. There is a drawback to this, the estimation of the cash totally relies upon the interest it has, that implies if the real speculators pulled back their cash, the estimation of this money will crash.
- There is no overseeing body. On the off chance that the cryptographic money is hacked, nobody will assume the liability to reimburse our cash.
- Many cryptographic forms of money went to the market after the development of bitcoins. New digital money may diminish the interest for prior cryptographic forms of money. Putting resources into these sorts of monetary standards will be unsafe.
- Cashless economy made monetary exchanges a lot simpler. Thus, there is no need of digital currencies.
- Ransomware programmers requested their installment through bitcoins, in light of the fact that it secures personality of the individual in money related exchanges.
The most important tip for Non techies:
During the discussion, an engineering candidate can come up with detailed explanations about Block chain technology and you may feel frightened and out of place.
The golden rule is to ‘Keep Calm’
Always remember the customers or users of digital methodologies for transactions are subconsciously worried about only two things:
- Security of their data and their hard earned money
- Ease of use
Therefore, you must reply “Dear friend, I sincerely appreciate the knowledge you possess about the technology used for the crypto currency transactions, but the customers are worried about the security and ease of use of the same. Apart, being management study aspirants, we need to focus on the customer expectations, than the nuances of the make how of it”
This kind of conversation will ensure that it is focused on the growth or fall of the cryptocurrency and not on the technical aspects of it.
For more GD/PI Topics Please Check below link
GD/PI: Demonetization – Success and failures – /articles/demonetizationsuccess-and-failures
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GD/PI: Cashless Economy: Is Society ready for Transformation? – /articles/cashless-economy-is-society-ready-for-transformation