Cryptocurrencies are a major or drastic change that has potential to soon takeover very important role in our societies. It can change how we do transactions, how we carry out businesses currently. It can be a new way of medium of exchange!
Before we get into the details, it is important to note that block chain as a tech has many applications, one of them is cryptocurrencies. Currently, most famous cryptocurrency is #Bitcoin
To understand how worried and concerned people in high positions are about crypto currencies, note the following statements by Shaktikant Das, RBI governor. (#RBI
is central bank of India, a counterpart of #FederalReserve
In an interview he said, "We have certain major concerns about cryptocurrencies. We have communicated them to the government. It is under consideration in the government and I do expect and I think sooner or later the government will take a call and if required Parliament also will consider and decide."
He also said, "I want to make it clear that the blockchain technology is different. Blockchain technology benefits have to be exploited, that is another thing. But on crypto we have major concerns from the financial stability angle and we have shared it with the government. The government will consider and take a call."
The applications of blockchain are widely accepted and demonstrated in different fields from health record keeping to land record keeping, etc. Thus it is clear that #blockchain will be used on wide scale in near future. But, what about cryptocurrency? For that let's first understand what is cryptocurrency?
What is cryptocurrency:
A cryptocurrency, crypto currency or crypto is a digital currency/asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerised database using strong #cryptography
to secure transaction records, to control the creation of additional #coins
, and to verify the transfer of #coin
ownership. It typically does not exist in physical form and is typically not issued by a central authority. Cryptocurrencies typically use decentralised control as opposed to centralised #digitalcurrency
and central #banking
systems. When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralised control, each #cryptocurrency
works through distributed ledger #technology
, typically a #blockchain
, that serves as a public #financial
Bitcoin, first released as open-source software in 2009, is the first decentralized cryptocurrency. Since the release of #bitcoin
, other cryptocurrencies have been created.
Current state of affairs and way ahead:
It has been reported earlier that the Indian government is planning to introduce a bill in Parliament to bar companies and individuals from dealing in cryptocurrencies while creating a framework for an official digital currency.
The RBI had in 2018 banned banks and other regulated entities from supporting crypto transactions after digital currencies were used for frauds. The Supreme Court cut the curbs last year in response to a petition by cryptocurrency exchanges.
The RBI governor has also stated that, "Central bank digital currency is work in progress. RBI team is working on it, technology side and procedural side, how it will be launched and rolled out,"
This shows that, authorities are taking a cautious approach towards this new tech. If ignored and left to market this has potential to challenge existing economic system. And if handled and leveraged properly this same tech can open new ways of administration for governments. Let's see how we proceed to accept this!