All
about Cryptocurrencies
By Dr. Lalit Kumar Setia
| @drlalitsetia | drlalitsetia@gmail.com |
Created Jan 26, 2018
The Government
of India (GoI) treated the Crypo-currencies as ‘ponzi scheme’and banned it to safeguard
the interest of investors. A lot of debates are carried out to decide whether
it should be allowed in India or not. The Crypto currencies such as Bitcoins
are considered by the ‘Investor Education and Protection Fund (IEPF) Authority’
under ‘Corporate Affairs Ministry’ and thereafter banned.
What is
Cryptocurrency?
During Jan
2017 to Nov 2017; the Bitcoin has jumped from under $1000 to $10000 which means
a return of over 900% and it made the minds of speculators work for more
trading in Bitcoins. Before understanding Bitcoin, one should also understand
block chain. Block chain is a name given to a tamper-proof digital ledger used
to record financial transactions. And the technology involved in block chain
made possible the functioning of cryptocurrencies like Bitcoin. Who is behind
the surge in prices of Bitcoin? Apart from Bitcoin, there are other such
currencies in international market i.e. Ethereum, Ripple and Litecoin but there
is not such upwards trend in their prices. Due to surge in the prices of
Bitcoin, the interest of investors in currencies based on block-chain
technologies is continuously increasing.
In India, the
consensus is upon protecting the interests of investors; and as the ‘Corporate
Ministry’ considers its viability in long-term and associated risks, keeping in
view steep fluctuations in its prices; declared it as banned. However, the
crypo-currencies are digital units with encryption used to trade in currencies
independently of a central bank.
In the modern
age of Information Technology, the speculation has also been transformed. The
bad habits are making youth oversee the value system and be greedy. The virtual
papers like bonds, currency agreements, virtual currencies i.e. cryptocurrency
have become a point of attraction particularly for those people who are not
earning money with making hard-efforts. Very few people are aware of Crypto-currencies
or digital currencies created and stored electronically in
blockchains. The people having trust in digital life are adopting these
currencies with using encryption techniques to transfer the money at
various locations of the world. There is need to aware people for ethics and
values by organizing campaigns. The cyber crimes are also taking place due to
mal-practices in routine works. With the surge in price of Bitcoin, massive
gains are being made by hedge funds.
What is Bitcoin?
In 1998, Wei Dai
suggested an idea to form money using cryptography without involvement of any
central authority. It is interesting to know that nobody owns the network of
Bitcoins however the Bitcoin users require use of software by complying the
rules of Bitcoin protocol. The Bitcoin is basically a mobile app providing
personal Bitcoin wallet for sending and receiving Bitcoins. Behind this wallet,
there is shared digital public ledger known as block chain. The transactions
are recorded in the ledger and can be verified by the user with use of digital
signatures. There is also facility of “mining” which gives opportunities to
users processing transactions with computing power of specialized hardware to
earn rewards in form of Bitcoins.
The Bitcoin
is basically peer to peer e-cash secured with messages, emails, digital
signatures on the basis of cryptography and the recording of transactions on
digital ledger normally called block-chain.
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