Cryptocurrency is a digital asset which acts as a medium of trade utilizing cryptography to secure the transactions and to control the production of additional units of the currency. Cryptographic forms of money are delegated a subset of computerized monetary standards and are additionally named a subset of elective monetary forms and virtual monetary
In 2009, Bitcoin became the first decentralized cryptocurrency. From that point forward, various cryptographic forms of money have been made. These are frequently called altcoins, as a mix of bitcoin substitute. Bitcoin and its subsidiaries use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is identified with the utilization of Bitcoin’s blockchain exchange database in the part of an appropriated record.
II.Review of Literature
Ruchi Nityanand Prabhu- The world of money and finance is transforming before our eyes. Digitised assets and innovative financial channels, instruments and systems are creating new paradigms for a financial transaction and forging alternative conduits of capital.
C.A. (Dr.) Pramod Kumar Pandey-The world of virtual currencies is becoming popular day by day. These currencies neither command any intrinsic value nor have any physical form and are traded on a decentralized platform without any central control.
Akshaya Tamradaman & Sangeeta Nagpure-Nowadays, there is a vast and fast development in cryptocurrencies. Bitcoin is one of them which are most popular and known as first decentralized currency.
III Research Methodology
v Objective of Study
I. To Study the Preference of the Indian Economy(Consumers) towards Cryptocurrency
II. To Study the Tremendous Growth in Price of Cryptocurrency
III. To Study the Reason for difference in Price of Different Cryptocurrency in Different Country and Exchanges
IV. To Study the Technology behind the Cryptocurrency
IV Primary Data Interpretation
To Understand the Preference of Indian Economy (Consumers) towards Cryptocurrency (Digital Currency) I have taken 100 Respondents Input for the Questionnaire (Attached in the Annexure).
I. Age of Respondents for the Cryptocurrency Questionnaire
Inference: The Majority of Respondents of the Questionnaire are of the age 18-25.
II. Do you Support the Anonymity of Cryptocurrency?
Inference: Majority of the Respondents support the Anonymity Feature of Cryptocurrency with 59% supporting the Anonymity Feature of Cryptocurrency.
III. Should RBI Legalize Cryptocurrency in India?
Inference: Majority of Respondents would like RBI to Legalise the Cryptocurrency with 53% support the Legalise Policy of Cryptocurrency and the rest have a differing view.
IV. Do you Think Cryptocurrency is Safe?
Inference: 48% of the Respondents have stated that Cryptocurrency is Safe, 28% have a Negative view of the Cryptocurrency and the rest are indifferent.
V. Will you want to convert your Cash into Cryptocurrency?
Inference: Majority of Respondents (56%) would like to convert their Cash into Currency whereas 44% of the Respondents would not like to convert the Cryptocurrency.
VI. Should India follow Japans footsteps to establish Cryptocurrency as a Medium of Exchange?
Inference: 56% of the Respondents would like to support the Cryptocurrency as a Medium of Exchange.
VII. Do you think Cryptocurrency will make the Economy Bullish if Legalized?
Inference: Majority (65%) feel that Cryptocurrency if legalised, will make our Economy more Bullish.
VIII. Will you buy Cryptocurrency as an Investment?
Inference: 69% of the Respondents would like to Invest in Cryptocurrency as an Investment.
IX. What % of Investment would you like to Invest in Cryptocurrency?
Inference: The Above Chart displays that the Majority Respondents would like to Invest in Cryptocurrency with 33%, 26 Respondents would like to Invest at the Rate of 10-20%, and 22% of the Respondents would NOT like to Invest.
Impact of Cryptocurrency in our Daily Lives
1. Faster and more cost-efficient bank transfers
There is nothing more irritating than having to pay exorbitant fees just to transfer money between banks, mainly if the transaction is a cross-country transaction. In genuine terms, the way that banks still exchange money is obsolete – they can take up to seven days; in some cases progressively and they include clearing houses and correspondent banks making the procedure highly complicated.
2. An increase in Global Remittances
Migrants from the third world and developing countries that have moved to western countries, send home over $500 billion in remittances to their families every year. This is a figure that far exceeds foreign direct investment, and with fees for international transfers between 6-10%, this is a tremendous burden on some of the world’s most vulnerable and less privileged people.
Cryptographic money and record innovation can spare them a fortune consistently by enabling them to influence moment and expense to free exchanges. By utilizing computerized money, clients could even send exchanges specifically by means of a cell phone and just need to pay negligible charges on cash trades.
3. Safe Money for those on a Lower Income
With mobile technology moving at a fast pace in African countries, moving at a quick pace in African nations, it is being demonstrated that creating nations can lead with regards to modern sorts of innovation. A few types of research even recommend that 60% of business and exchange Kenya is done by means of the trading of cell phone credits.
4. Providing Stability in Unstable Currencies
While the idea of digital money is still in their early stages and are in this manner not as stable that develops monetary standards, for example, the EUR or USD, a few nations could absolutely profit by cash, for example, Bitcoin. In Venezuela for example, inflation has grown a humungous 128% since the start of 2017 which has led to widespread social and economic unrest. Bitcoin is a more stable currency than the Venezuelan Currency. In fact, Bitcoin use has grown seven times in prominence since the start of the year, and it could be a keen move for Venezuelans searching for a more steady approach to store their money.
5. Quicker Transfers
With an expanded utilization of cryptocurrency, the times of holding up days, and some of the time a long time for exchanges to be influenced could be finished. There is most likely that digital forms of money offer a more secure and effective method for settling a constant exchange through their utilization of record innovation. There is almost certainly that they could soon turn into a reasonable other option to a charge card, bank wire, or wire exchanges.
Cryptographic money, for example, Ripple offers financially savvy and fast exchanges of fiat cash.
6. Power to the People
It is, in any case, an incredible open door for cryptocurrency as they are decentralized. Offering clients fewer layers of intermediation, the digital money sets the principles and directions around consistence and gives a practical contrasting option to the much-manhandled keeping money framework.
VI. Advantages of Cryptocurrency
Cryptocurrencies are digital and cannot be forged or reversed arbitrarily by the sender, unlike credit card charge-backs.
b) Immediate Settlement
Purchasing real property typically involves some third parties (Lawyers, Notary), delays, and payment of fees. Cryptocurrency contracts can be designed and enforced to eliminate or add third party approvals, reference external facts.
c) Lower Fees
Cryptocurrency transactions charges are next to Zero because Miners are compensated by the Cryptocurrency Network.
d) Identity Theft
When credit card details are provided to a merchant you directly provide him with the authority to your full credit line. Credit cards operate on a “pull” basis, in which the merchant pulls in the payment to their account. Whereas, Digital Money uses a “push” mechanism which allows the cryptocurrency holder to send only what he or she wants to the recipient.
e) Access to Everyone
Approximately 2.2 billion individuals around the world who have access to the Internet or mobile phones but do not have access to the traditional exchanges; these people are made for the Cryptocurrency market. The international transaction is extremely easy with cryptocurrency because it functions without a Central Bank of any nation.
Worldwide systems of PCs utilize blockchain technology to together deal with the database that records Bitcoin exchanges. That is, Bitcoin is overseen by its system and no one central expert. Decentralization implies the system works on a client to-client (or shared) premise.
g) Recognition at Universal Level
Since cryptographic money isn’t bound by the trade rates, interest rates, exchanges charges or different charges of any nation; in this way, it can be utilized at a universal level without encountering any issues. This, thus, spares heaps of time and also cash with respect to any business which is generally spent in exchanging cash from one nation to the next. Cryptographic money works at the all-inclusive level and consequently makes exchanges very simple. There is no other electronic trade framework out which your record isn’t claimed by another person.
h) User Anonymity
Cryptocurrency purchases are discrete. Unless a user voluntarily publishes his Digital Cryptocurrency transactions, his purchases are never associated with his personal identity, much like cash-only purchases, and cannot be traced back to him. In fact, the anonymous Bitcoin address that is generated for user purchases changes with each transaction.
i) Purchases Are Not Taxed
Meanwhile, there are ways for third parties to identify, track or intercept transactions that are denominated in Cryptocurrencies and one of the major advantages of Bitcoin is that sales taxes are exempted.
j) Mobile Payments
Like with numerous online payment systems, Cryptocurrency clients can pay for their coins anyplace they have Internet access. This implies buyers never need to the movement to a bank or a store to purchase an item.
k) Quick and easy payments
You can do it in simply a question of a couple of moments. It is quick since you don’t require personal details; you don’t have to enter your credit/check card subtle elements. All you require is the address of the wallet of the individual or undertaking to which you wish to make the payment as well. The sum should credit to the recipient inside a couple of moments to a couple of minutes depending on the type of cryptocurrency that is being in use. The simplicity of exchange and the low exchange charges makes it exceptionally attractive.
l) Highly Secured:
Every one of your exchanges will be secure as it is utilizing NSA made cryptography. It is alongside inconceivable for any individual other than the proprietor of the wallet to make any payment from the wallet unless they were hacked which there numerous approaches to shield you from being.
Disadvantages of Cryptocurrency
a) Difficult to understand
Digital Currencies are relatively new and people end up investing in it without the proper prior knowledge and lose money to something they did not understand about.
b) Not Accepted widely
Very few sites and organizations acknowledge Cryptocurrencies yet. Not many nations have legitimized the utilization of digital currencies. It makes it illogical for daily utilization. Because of the absence of acknowledgment, before purchasing or contributing on the web or disconnected, you have to ensure that it’s acknowledged at that place where you need to utilize it.
c) Can lose your wallet
There is a probability of losing your wallet. In the event that you have put away the cash as cryptocurrency on your mobile or PC, you better recollect your secret password and not lose those gadgets. Losing your coins implies you won’t have the capacity to recover it, even with the assistance of lawful help.
Since cryptocurrencies are new, they are highly volatile. This is the reason why mass adoption is taking longer than it should. Many companies don’t want to deal with a form of money that is going to go through high volatility.
e) No Buyer Protection
When goods are bought using Cryptocurrency and the seller doesn’t send the promised goods, nothing can be done to reverse the transaction.
f) Built in Deflation
Since the aggregate number of of many Cryptocurrencies is topped at a certain number of coins that can be produced it will cause deflation. Each Cryptocurrency will be worth more as the aggregate number of Cryptocurrency maximizes. This framework is intended to remunerate early adopters. Since each Digital Currency will be valued higher with each passing day, the subject of when to spend becomes essential. This may cause spending surges which will cause the Cryptocurrency economy to fluctuate quickly, and eccentrically.
g) No Valuation Guarantee
Since there is no central authority overseeing Cryptocurrency, nobody can ensure its base valuation. If a large group of merchants decided to “dump” Cryptocurrency and leave the framework, its valuation will diminish significantly which will hugely hurt clients who have a lot of investments in Digital Currency. The decentralized idea of Cryptocurrency is both a boom and bane.
h) Lack of Regulation Facilitates Activity on Black Market
Presumably, one of the biggest drawbacks and regulatory concerns surrounding cryptocurrency is its ability to facilitate unlawful activity. There are many grey and black market online transactions which are denominated in Bitcoin and other cryptocurrencies.
i) Potential for Tax Evasion
Since national governments do not regulate cryptocurrencies, the cryptocurrencies usually exist outside their direct control, and naturally, attract tax evaders. There are many small employers who pay employees in Bitcoin and other cryptocurrencies. They do this to avoid liability for payroll taxes and to help their workers avoid income tax liability.
j) Potential for High Price Volatility and Manipulation
Many cryptocurrencies have few outstanding units that are concentrated in a handful of individuals’ (often the creators of the currencies and close associates) hands. These holders effectively control the supplies of the currencies, making them susceptible to wild value swings and outright manipulation.
Types of Cryptocurrency
Bitcoin is the first and most well-known cryptocurrency. Bitcoin serves as a digital gold standard in the cryptocurrency world and is used as a global means of payment and is the by default currency of cyber-crime like dark net markets or ransom ware.
The brainchild of young crypto-genius Vitalik Buterin which was launched in 2015 has climbed to the second place in terms of Popularity in the Digital Currency World. As Bitcoin, Ethereum blockchain does not only validate a set of accounts and balances but of so-called states, this implies Ethereum can process exchanges as well as unpredictable contracts and projects.
Ripple is a real-time global settlement network that offers instant, certain and low-cost international payments. Ripple “enables banks to settle cross-border payments in real time, with end-to-end transparency, and at lower costs.” Ripple’s consensus ledger — its method of conformation — doesn’t need mining, a feature that deviates from Bitcoin and altcoins.
Ripple is an on-going worldwide settlement network that offers instant, certain and minimal cost international payment. Ripple empowers banks to settle cross-outskirt instalments continuously, with end-to-end straightforwardness, and at bringing down costs. Ripple’s consensus ledger does not require mining, an element that goes astray from Bitcoin and altcoins.
Risks Related to Cryptocurrency
I. Cyber Attacks and Hacking: “Virtual Bank Robbery”
Assaults by “cyber thieves” are getting frequent, with the progression of time. Particularly Bitcoin, the Bitcoin Community has been hit by such burglaries, more than once. This creates panic in the Bitcoin as a Cryptocurrency, which leads to a decrease in the esteem, of the cash.
II. Price Fluctuation and Inflation
One of the real reasons why today numerous organizations and merchants abstain from utilizing Cryptocurrency as a medium of exchange is that it is new and the volatility of Digital Money leads to a great degree of Uncertainty. This again prompts the vulnerability and diminished trust in the money.
IV. Uncertainties in the Government Policies
One of the major risks here is that any government may come around and proclaim it, illicit, leaving the speculators without cure and helpless.
Future of Cryptocurrency
The market of Cryptocurrency is quick and wild. Almost consistently new cryptographic forms of money develop, old cryptocurrencies go down and early adopters get rich. Each cryptographic money accompanies a guarantee, for the most part, comes with an intention to turn the world around. Scarcely any survive the first few months and most are pumped and dumped by speculators.
Markets are messy. In any case, this doesn’t change the way that cryptographic forms of money are setting down deep roots and are here to change the world. This is as of now happening. Individuals everywhere throughout the world purchase Bitcoin to ensure themselves against the degrading of their national money. Generally, in Asia, a striking business sector for Bitcoin settlement has risen and the Bitcoin utilizing dull nets of cybercrime are prospering. An ever increasing number of organizations find the energy of Smart Contracts or token on Ethereum, the main certifiable use of blockchain advancements develop.
The transformation is already happening. Institutional investors begin to purchase cryptographic forms of money. Banks and governments understand that this development can possibly draw their control away. Digital currencies will change the world. You can either remain close to or watch – or you can turn out to be a piece of history really taking shape.
The world of digital currency is setting down deep roots and as individuals give it esteem as a store of riches, its progressive instalment preparing capacity and the capacity to work between countries are for the most part the reasons to keep on using the Cryptocurrency.
It comes down to the view of a dominant part; anything has an incentive to somebody since they trust it. The principle factors influencing the value of digital currency have been discussed, and view of significant worth is the thing that at last gives it esteem, what individuals will put in to get a unit of cryptographic money, be it time, fait cash.