ESSAY ON CRYPTOCURRENCY AND ISSUES RELATED TO IT
ESSAY ON CRYPTOCURRENCY AND ISSUES RELATED TO IT : The advent of the pool of technologies has led to the surplus development and progress of mankind. Earlier people used to do every task manually and this required effort and time. Gradually the trend started changing and the invention of machines and tools started changing our lifestyle. The scenario has greatly changed in the 21st century. The wave of digitalization has brought a revolutionary change in the lifestyle of human beings. These all would not have been possible without the invention of the technologies like internet and computers. Digital technologies have become more prevalent after the outbreak of the Covid-19 pandemic. The cryptocurrency that is stated as digital currency is a burning topic nowadays.
10 Lines Essay on Cryptocurrency and Issues Related To It
1) Cryptocurrency is a form of virtual currency that can be used digitally.
2) Bitcoin, Dogecoin, Ripple, etc are some examples of cryptocurrency.
3) The records of cryptocurrencies are stored securely in Blockchain.
4) The first decentralized cryptocurrency “Bitcoin” was developed in 2009.
5) At present, there are more than 7000 cryptocurrencies in the world till November 2021.
6) Cryptocurrency is a cost-effective technology.
7) It also provides fast and highly secure transactions.
8) Cryptocurrency is a decentralized technology therefore people may have trust issues.
9) However, it is not considered as a legal tender across the world.
10) Countries like China, Turkey, Egypt, etc. have banned Crypto.
Long Essay on Cryptocurrency and Issues Related To It in English
This topic is very important for the basis of competitive exams. The students of higher classes and colleges often get this topic in exams for writing essays and debates. I have provided an elaborated essay on this topic that contains the details of the topic. I think it might be helpful to all the students and readers in getting a precise idea about this topic.
1900 Words Essay – Cryptocurrency : Decentralized Digital Currency
Currency is regarded as means of exchange for goods and services and that differs in the different countries. It is stated as the money that we use and that is required by us to fulfill our different needs. The advancing technology has given rise to new types of currency and that is named cryptocurrency. It is a currency that is not available physically but it is a digital currency. It is new technology and thus an interesting topic for all. Let’s discuss this emerging technology, origin, advantages, and issues related to this form of currency in the essay below.
What is meant by Cryptocurrency?
We all are well aware of the term currency or money. It is stated as the basic requirement of the people for getting different goods and services. Money that we use for different purposes i.e. to buy different things, for investments, doing transactions, etc is in the physical form. A cryptocurrency is also a form of currency but it is not available in physical form. It is a newly developed currency that is an internet currency and can only be used digitally. In other words, cryptocurrency is a newly invented form of currency that is termed digital or virtual currency. Bitcoin, Ripple, Dogecoin, etc are some of the examples of cryptocurrencies.
Cryptocurrency is a set of binary data and that is used as a medium of exchange for goods and services. The record of every coin in cryptocurrency is being stored in the digital ledger cryptographically in a secure way so that no changes can be made in the transaction data. The people get the authority of the token according to the amount they have given for stake in cryptocurrency. It is stated as the centralized currency after it is issued by a single user. Later when it is stated as decentralized, its options are available on the digital ledger of every connected user in the blockchain. Bitcoin is referred to as the first decentralized cryptocurrency that was invented in the year 2009. There was the invention of different cryptocurrencies after the invention of Bitcoin.
History of Cryptocurrency
- David Chaum an American Cryptographer was the first one to create electronic money or ecash in the year 1983. This was brought into use by him in the year 1995 in form of Digicash. The earlier form of electronic payment required the use of software and encrypted keys for continuing any kind of transaction.
- Later, there was the invention of ‘B-money’, a distributed electronic cash system in the year 1998 by Wei Dei. Bitgold was further discovered by Nick Szabo. It was also an electronic currency system in which proof of work function was essential for all the users to cryptographically publish the same.
- Bitcoin that is regarded as the first decentralized cryptocurrency was then developed in the year 2009 by Satoshi Nakamoto. It required a cryptographic hash function and the proof of work scheme. Namecoin, Litecoin, and Peercoin were subsequently developed thereafter in the year 2011.
- The United Kingdom in the year 2014 ordered its financial department to conduct a study on cryptocurrency and also state the impacts that it can make on the nation’s economy.
- Recently in the year 2021, the government of China, which was stated as the largest market for cryptocurrency got crashed as the country declared all the cryptocurrency transactions illegal. This incident also banned the working of intermediaries and miners in China.
Classification of Cryptocurrency
The first developed decentralized cryptocurrency was Bitcoin. It has attained great popularity and is being used in the different nations of the world. The credit for the invention of this cryptocurrency goes to Satoshi Nakamoto in the year 2009. Various other cryptocurrencies have been designed after the emergence of Bitcoin and all are specific in their functions. There are more than 7000 cryptocurrencies in the world till November 2021. The other cryptocurrencies except Bitcoin are termed Altcoins. They are Litecoin, Peercoin, Namecoin, Ethereum, Cardano, etc. The expected value of all the existing cryptocurrencies is about 1.5 trillion dollars.
Advantages of Cryptocurrency
- No Need for Third-Party Involvement- There is no any involvement of third parties for transferring funds between parties because of the development of cryptocurrency.
- Cost-effective and Efficient technology- The process of transfer of funds incurs no extra charge and takes place at a faster rate. The miners involved get awarded by cryptocurrency from the network after the process of the transaction.
- Secure Technology- The data of the transaction is safely stored in the blocks with full privacy and cannot be edited by anybody. This protects the user from any kind of fraud and cybercrime.
- Privacy- The private keys can be used by the users to access their own cryptocurrency with full privacy. Many E-wallets of cryptocurrency are provided with the private key and thus they can only be assessed by the owner itself.
- No Barriers in Joining the Network- Anybody can easily join a network of cryptocurrency as there are very no such restrictions for presenting the proof of identity, income and address.
Issues linked with Cryptocurrency
Every technology is a blessing for mankind as it is benefitting us in different ways but there are some of the disadvantages also associated with it. The issues or disadvantages linked with the use of cryptocurrency are stated below:
- High Volatility in The Values of Cryptocurrencies- There is a high fluctuation in the values of cryptocurrencies as it is totally dependent on the supply and demands. This greatly affects the cryptocurrency holders.
- Illegal Use- There is high privacy in transactions of the cryptocurrency and thus it can easily be a medium for carrying out illegal activities like money laundering, terror-financing, selling drugs, child pornographies, criminal activities, etc.
- Not Monitored by Central Authority- Cryptocurrencies are decentralized that implies that it is not controlled by any single authority or central authority. It is managed and monitored by all the users in the network. Thus, it is not considered a reliable currency as it does not have central control like the Reserve Bank of India has on the monetary policy. The people also do not trust in investing in cryptocurrency as it is not controlled by a central authority and thus has no reliability.
- Difficult to Operate by the Uneducated Mass- The people who do not have the knowledge of the internet or are uneducated cannot access this technology. Thus such people could not avail the benefit of digital currency.
- High Energy Consumption- High power consumption is there in the process of mining the cryptocurrency. High power consumption states that it is not a sustainable technology as it possesses greater pressure on power production. This can also result in rising in power prices and give rise to issues like global warming.
- Not Accepted Everywhere- Cryptocurrency is not having acceptance everywhere in the world. It is only accepted at few places. Moreover, the transactions are not reversible.
Cryptocurrency in India
- The invention of Bitcoin in cryptocurrencies gave this currency new heights and popularity. The people became more familiar with this technology during the pandemic due to the outbreak of Covid-19. It had been a burning topic in different countries of the world including India. The investors and businessmen of India and different nations started taking interest in using this currency in trade and commerce after the advent of Bitcoins in the market.
- Later in the year 2018-19, it was announced by the Finance Minister of India that the country does not consider the private cryptocurrency as a legal tender in India. It was also announced by the Reserve Bank of India that none of the banks will deal in cryptocurrencies. Thus, a blanket ban was imposed by the nation on the use of cryptocurrency.
- The government of India at present has decided to introduce the bill called Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. It will be implemented to ban all the private cryptocurrencies and create a digital currency in the nation.
- The fund allocated by the Indian government for initiating the blockchains is very less therefore it is very difficult for investors and entrepreneurs to attain economical benefit from cryptocurrencies.
Increasing Trend of Cryptocurrency in the World
The advent of cryptocurrency is a great innovation in technology. The invention of the blockchain is the basis of the working of cryptocurrency. It is because of this technology that cryptocurrency is made decentralized. Bitcoin was the first decentralized cryptocurrency invented in the year 2009. Thereafter many such cryptocurrencies have evolved. In beginning, this innovation did not get any importance but is gaining more attention at present.
Although, there are many countries that have not encouraged its use but many of them have started taking interest in this digital currency. Recently, countries like Japan and Australia have made it a legal tender. Moreover, many investors and businessmen are taking interest in accelerating their businesses by using cryptocurrencies.
How does Cryptocurrency affect Society and the Economy?
The cryptocurrency or digital currency is gaining popularity at present. The data of transactions of the cryptocurrency is recorded and stored in the blocks of blockchain technology. The advent of cryptocurrency and its use in the future will be changing the mode of utilization of money by the people. The new ways will develop for the exchange of the currency for goods and services as it is a digital currency and is decentralized.
The use of cryptocurrency will result in making society a better one. It is because the transaction process in this system is more efficient and secure. This will help in reducing the errors, frauds, and cheating taking place in the transactions and paper works. The record of every transaction is available in the blocks and making changes or tampering of records is impossible. This in turn will also have a positive impact on the economy of the nation.
Future Scope of Cryptocurrency
The future of cryptocurrency totally depends upon the regulatory measures and framework given by different countries in the world. At present, there are certain challenges in operating this currency in different countries of the world. The most important issue is security and regulation and overcoming the challenges might help this form of currency to flourish in the future. Many people fear investing in such currencies that are not having any central authority for control. The people investing money in this are mainly with a motive of earning money. They do not prefer this technology for doing transactions and other works.
Blockchain technology has blocks of record linked together. Such technology can be devised in the banking and commercial sectors to know the details of every step of the transactions. This will help in reducing any kind of illegal transactions that are happening by the use of digital currency. Recently the finance minister of India has also stated that there will not be a complete ban on cryptocurrencies in the nation. Several studies and experiments will be conducted by the assigned people in the government to move forward in embracing this technology.
Cryptocurrency is well designed by using every modern technique like the internet and developed software. The invention of cryptocurrency has been greatly helpful in fostering digitalization. The control and management of cryptocurrency by the blockchains are encrypted and this is a boon for investors and businessmen. The countries have to make regulations to get more clarity about the use of cryptocurrencies and blockchains. The establishment of specific rules and guidelines by the government will aid in reducing the limitations of this wonderful technology. This will enable digital currency to become more eminent and successful in the world in the coming future. I have tried to provide the details of this topic in a very easy format.
I hope that all the students and readers will love reading the essay on Cryptocurrency and issues with it.
FAQs: Frequently Asked Questions on Cryptocurrency
Q.1 Which country was the first in the world to accept Bitcoin as a legal tender?
Ans. El Salvador was the first country in the world to accept Bitcoin as a legal tender.
Q.2 What is the other name given to cryptocurrency?
Ans. Digital currency is the other name given to Cryptocurrency
Q.3 Which cryptocurrency has the short form BTC?
Ans. BTC is the short form of the currency named Bitcoin.
Q.4 Which software is used in making the cryptocurrency Bitcoin?
Ans. Open-source software is used in making the cryptocurrency Bitcoin.
Q.5 Which is the most popular cryptocurrency after Bitcoin?
Ans. Ethereum is the most popular cryptocurrency after Bitcoin.
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