Essay on Cryptocurrency: As the topic of regulation of cryptocurrency is very highlighted, essay on cryptocurrency is very important topic of essay for all competitive exams as well as academic exams. Here, we have written an essay on cryptocurrency for all you.
Essay on Cryptocurrency in India
Since the inception of Bitcoin in 2009, popularity of cryptocurrency has grown rapidly. Many other new cryptocurrencies are launched since then and widely used as a medium of exchange. Due to its popularity and usability, price of bitcoin has already been touched $63000 in April 2021.
A cryptocurrency is a virtual or digital currency that is highly secured by cryptography or encryption techniques which makes it nearly impossible to counterfeit such cryptocurrency. These cryptocurrencies are designed to work as a medium of exchange. Cryptocurrencies are generally not issued by the government agency of any country. The decentralized nature of cryptocurrency networks shields it from any control of government regulatory bodies on it.
Types of Cryptocurrency
Bitcoin is the first type of cryptocurrency that presently remains the most used, valuable, and popular. After bitcoin, many other alternative cryptocurrencies with varying degrees of functions and specifications have been created. Bitcoin which is the most popular cryptocurrency was launched in 2009 by an individual or group known by the pseudonym “Satoshi Nakamoto”. In the month of April 2021, the price of bitcoin crossed $63000.
In the wake of the success of Bitcoin, many other cryptocurrencies have been launched. Some of these cryptocurrencies are clones or forks of Bitcoin, while others are new cryptocurrencies built from scratch. These cryptocurrencies are known as “altcoins”. Ethereum, Solana, Litecoin, Cardano, Namecoin, etc are some other popular cryptocurrencies.
Advantages of cryptocurrency
Through cryptocurrency funds transfer between two parties will be easy and there is no need of third party like credit/debit cards or banks. It can help save money and time for both the remitter and the receiver as it is conducted entirely on the Internet. Cryptocurrency runs on a mechanism that involves very less transaction fees which makes it a cheaper alternative compared to other online transactions. As the payments are encrypted, they are safe and secured and offer an unprecedented level of anonymity.
Disadvantages of cryptocurrency
As there is no regulation over cryptocurrencies, it is a possibility that cryptocurrency may be used for illegal activities such as money laundering, tax evasion, and possibly even terror-financing. Another disadvantage of cryptocurrencies is that they are not accepted everywhere.
Cryptocurrency and India
Since the inception of most popular cryptocurrency i.e. bitcoin in the year 2008, cryptocurrencies have gained much significance all around the world including India. Now Government of India has framed a rule for transactions and acceptance of cryptocurrencies and marked India’s first step towards entering the new phase of digital revolution. A flat 30% capital gains tax on crypto profits and a 1% tax-deductible at source (TDS) on all transactions involving crypto, no offsetting of losses, and taxation of crypto gifts was proposed by Finance Minister during the budget speech. However, cryptocurrencies remain unregulated in India, and taxing cryptocurrencies does not make them legal.
Is banning cryptocurrencies a problem?
Banning cryptocurrencies may result in an exodus of both talent and business from India. Also, blockchain and crypto experts might move to countries where crypto is regulated. A blanket ban on cryptocurrencies might also halt blockchain innovation which has uses in governance data economy and energy.
As the use and acceptability of cryptocurrencies are rapidly growing across the world, largest enterprises such as Tesla and MasterCard has adopted cryptocurrencies, a ban on cryptocurrency might deprive India, its entrepreneurs, and citizens of transformative technology.
Is the regulation of cryptocurrencies a solution?
As the cryptocurrency has its own advantages and disadvantages, regulation of cryptocurrency is needed to prevent serious problems to ensure that cryptocurrencies are not misused, and to protect unsuspecting investors from excessive market volatility and possible scams. However, regulation needs to be clear, transparent, coherent with a vision that makes investments and transaction in cryptocurrencies safe. Government should regulate the trading of cryptocurrencies by including stringent KYC norms, reporting and taxation.
Conclusion: Essay on Cryptocurrency
Cryptocurrency is getting popularity rapidly and many large scale companies are accepting it. From it, it is expected that cryptocurrency is next phase of digital revolution and has the potential to channel its human capital, expertise and resources into this revolution.
Hope you liked this essay on Cryptocurrency. As the topic of regulating cryptocurrencies are going on, essay on cryptocurrencies is very important essay topic for all competitive as well as academic exams.
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