Cryptocurrencies are essentially digital mediums that can be exchanged, just like government currencies, that use cryptography or digital security measures to secure the exchange of digital information and control the creation of new units.
In other words, cryptocurrencies are digital coins that fluctuate in value similar to stocks with their exchange being backed by digital security measures.
Cryptocurrencies are digital security or money that is exchangeable for physical money like rupees. People get quickly rich in their dreams. Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created.
Father of cryptocurrency, Bitcoin began 2017 worth $1000 per coin and closed the year at $19000. Other crptocurrencies in the market which are digitally sent and received electronically are also rising high in their value.
Nations like Russia and Venezuela said that they will issue their own cryptocurrencies but most of the nations are considering banning trading in cryptocurrencies completely, fearing that these currencies pose a threat to the country’s economic power.
Some speculators view cryptocurrency as a lottery ticket. Betting on a particular cryptocurrency is fraught with uncertainty and high risk.
Cryptocurrencies have raised high due to the reason that maximum number of people are getting attracted towards it because they see day by day going up prices of cryptocurrencies. 2017 was a year of cryptocurrency mania. Bitcoin reached an unexpected increase of $1900.
As Bitcoin shot to the moon, people searched for the other cryptocurrencies like Ripple, Ethereum, ATC and started investing into them. As like Bitcoin, the other cryptocurrencies also reached to about 90% from its actual value when it came into market.
An important thing about cryptocurrenicies is that investors are subjected to significant cybertheft risk, as market exchanges are common targets. Last year in last months, a Japanese exchange was hacked & investors lost over $500 million.
In India, speculators were having lot of hopes on 2018-Budget regarding lifting a ban on cryptocurrency but all their dreams were shattered when cryptocurrencies in India suffered a major setback last week.
In the Budget speech, Finance Minister Arun Jaitley made it clear that cryptocurrencies are not legal forms of money in India and government would take steps to eliminate their use.
The basic reason for such orders from the government is that cryptocurrencies pose a significant threat to the massive economic power that national currencies, such as rupee and dollar, provide their governments.
Every country’s has a legal monopoly on the currency that their people use. This clearly means that no one other than government can create currencies. These cryptocurrencies could be beneficial for citizens, but it erodes governments control over money.
One more reason for not allowing cryptocurrencies in India is that the any kind of action of Govt on currency like demontisation would not be much effective as people would throw their money into cryptocurrency so as to prevent themselves from the effect of such actions.
I will end up here that until now cryptocurrencies have failed to show signs of value stability owing to extreme fluctuations. My advice to those contemplating buying cryptocurrencies is that they should properly understand cryptocurrencies and it’s working procedure. They should understand their personal risk tolerance and if they are interested to invest then they should invest only that amount of money which he is willing to lose and won’t impact them financially.
(The author is a Freelance Writer & can be reached at Kaleemgeelani11@gmail.com)