CRYPTO-CURRENCY
CRYPTO: Hidden. CRYPTOCURRENCY: HIDDEN CURRENCY
Crypto-currency is a kind of digital currency that uses
digital files for the purchase of services & goods. It works exactly like
credit cards, PayPal & other platforms but in digital assets. No INR or USD
is involved in transactions of CRYPTO.
How does it work?
It works on blockchain technology, which makes it very
secure. A Blockchain is data that is shared with computers. The data or
information is gathered in groups which are called “blocks” with a specific
storage capacity. Once it is filled the block is closed and is linked to the
previous block and thus a chain is formed and called a “blockchain”.
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| Photo by Maxim Hopman on Unsplash |
How to purchase?
Users have to sign up at a CRYPTO exchange with their KYC
credentials using an Aadhar card, PAN card. After successful signing up user
can purchase it. Some top exchanges in India are WazirX, CoinDCX, Coinswitch,
Kuber, and Unocoin. Users have to use the currency (valid legal tenders) to
purchase CRYPTO.
What to purchase with Crypto?
As crypto is going mainstream since 2017, many of the companies
are accepting BITCOIN as payments. You can buy luxury cars, technology & eCommerce
products, etc. The prominent ones which are accepting BITCOIN as payment are
TESLA, MICROSOFT, AT&T.
Risk involved
Since it is unregulated by any governing agency, a huge risk
is involved. There were times when people invested in BITCOIN heavily &
gained profits. But due to no regulations & market volatility, it came down
crashing heavily. Those who held their early investments till today in BITCOIN
are billionaires. Still, the risk looms. CRYPTO market works upon the demand
& supply mode. The higher demand more will be the rate.
Legal or Illegal?
Illegal would be a wrong term, rather UNREGULATED is more
suitable. Currently, there are around 14K+ cryptocurrencies available in the market. There are many other services which are unregulated
private healthcare, share market, e-commerce, cab services. RecentlyGovernment of India is trying to work upon regulations to bringCRYPTOCURRENCIES under the tax net.
Pros & Cons
Pros: No chance of data leakage. Extremely secure so no
fraud or scam. Secure & instant transfers of ownership. Difficult to trace
the money trail.
Cons: The risk of loss is high. Can be used in illegal
activities. Due to an unregulated market, it is highly volatile.
Conclusion
Crypto investments are subject to market risk. It is not a
legal tender & unregulated currency. There are no documents to read before
investing in it. My take is if you can sustain the down period of the crypto
market then only take a plunge into it.
