Due to the recession in the markets around the world since the beginning of this year, its impact has been seen in the crypto market as well. Due to the weakening of cryptocurrency in the market for some time, Indian investors are also seen withdrawing money from it on a large scale. This has started a debate in the market whether the days of cryptocurrency in India are over or will NFT or cryptocurrency once again bring color to the market?
Some new rules related to crypto have also come into effect in India in the year 2022. These include the provision of 30 percent tax on crypto income and 1 percent TDS on crypto transactions. Experts believe that its impact is being seen on the figures of investment in cryptocurrency. According to ZebPay CEO Avinash Shekhar, since the new rules came into effect, there has been a decline in the number of investments in cryptos and the launch of startups related to it.0
Understanding Cryptocurrency
Cryptocurrency systems allow secure online payments that are denominated in virtual ‘tokens’ represented by ledger entries internal to the system. Crypto refers to various encryption algorithms and cryptographic techniques that protect these entries, such as elliptic curve encryption, public-private key pairs, and hashing functions.
Types of Cryptocurrencies
The first blockchain based cryptocurrency was Bitcoin which still remains the most popular and valuable. Today there are thousands of alternative cryptocurrencies with different functions and specifications. Some of these are clones or forks of Bitcoin while others are new currencies. Bitcoin was launched in 2009 by an individual or group under the pseudonym of ‘Santoshi Nakamoto‘.
What is cryptocurrency?
What is cryptocurrency? A digital or virtual currency, it is secured by cryptography making it virtually impossible to be counterfeited or spent twice. Many cryptocurrencies are decentralized networks based on blockchain technology a distributed ledger implemented by a disparate network of computers. A key characteristic of cryptocurrencies is that they are not issued by any central authority which makes them theoretically immune to government interference or manipulation.
How many names does it have?
Rupee, Dollar, Euro, Yuan, Yen etc. are the names of physical currencies i.e. their notes or coins can not only be seen but can also be touched. Like physical currency, crypto currency also comes with different names. You must have heard the name of Bitcoin. This is crypto currency. There are about 1000 types of crypto currencies in circulation around the world. The names of some crypto currencies and their values are as follows:
- Bitcoin-BTC-Rs 42.74 lakh
- Ethereum-ETH-Rs 1.33 lakh
- Binance Coin-BNB-20 thousand rupees
- Polkadot-DOT-2854 RS
- Uniswap-UNI-Rs 2434
Why is this currency tempting?
Many people in the world are running after crypto currency. Many businessmen, including who is Elon Musk, among the top rich, invest in Bitcoin. This is the reason why today the price of 1 bitcoin is more than 42 lakhs. One year ago, i.e., on March 21, 2020, the price of 1 Bitcoin was Rs 4.69 lakh. Within a year its price increased 9 times i.e., a return of 900%. In such a situation, many people are buying it for investment also. One reason is that it is prevalent in many countries of the world.
In such a situation, to transfer money from one country to another, there is no need to convert the currency of one country into the currency of another country. Not only this, it takes maximum 10 minutes to transfer money from one bank account to another. No matter which country the bank account is in. Many companies around the world including Tesla are accepting crypto currency. This year, Mastercard will allow merchants to accept payments in cryptocurrency.
Blockchain: Hacking Difficult
Crypto currency is based on blockchain technology. In such a situation, it is very difficult to hack it. In simple words, it is a digital ‘public ledger’ (public ledger), in which a record of every transaction is recorded. Once anyone’s transaction is recorded in the blockchain, it can neither be removed nor modified. Due to blockchain, crypto currency transactions are quite reliable and for this, third parties like banks.
Is it legal in India?
People in our country have been investing in crypto currency for many years. There is no rule regarding this. In the year 2018, after the instructions given by RBI to the banks, investment in cryptocurrency in India almost stopped. The matter reached the Supreme Court. In March 2020, the Supreme Court rejected the RBI circular, which again opened the way for investors to invest in cryptocurrency. At that time the court had asked the government to make a law for this. In such a situation, investing in cryptocurrency is still legal in India.
Loss
- Cryptocurrency transactions are done through a code and password. If you forget the code or password, the entire amount invested in it is lost. This amount cannot be recovered.
- There is no country, government or institution to control it, due to which its price sometimes increases a lot and sometimes falls a lot. Therefore, investing in it is risky.
