CRYPTOCURRENCY

Meanings, Facts and Trends

Presented By :-
Karan Verma
Saurabh Chaudhary
MEANING
• Cryptocurrency (or crypto currency) is a digital
asset designed to work as a medium of exchange
using cryptography to secure the transactions
and to control the creation of additional units of
the currency.
• Cryptography is associated with the process of
converting ordinary plain text into unintelligible
text and vice-versa. It is a method of storing and
transmitting data in a particular form so that only
those for whom it is intended can read and
process it.
 History
• There have been many attempts at creating a digital
currency during the 90s tech boom, with systems
emerging on the market but inevitably failing. There
were many different reasons for their failures, such
as fraud, financial problems and even frictions
between companies’ employees and their bosses.
• Due to the failures of these companies, the creation
of a digital cash system was seen as a lost cause for
a long while.
• Then, in early 2009, an anonymous programmer or a
group of programmers under an alias Satoshi
Nakamoto introduced Bitcoin. Satoshi described it
as a ‘peer-to-peer electronic cash system.’ The
concept closely resembles peer-to-peer networks for
file sharing.
Conventional vs Cryptocurrency
CONTD….
 Benefits
• Low-cost money transfers- Their ability to send and receive payments at
a low cost and at a high speed.
• A censorship-resistant alternative store of wealth- Only the
individual with the private keys to the wallet has access to. Hence, no
personal bitcoin wallet can ever be frozen by the authorities.
• Invest in innovative early-stage startups- anyone with an Internet
connection to become an investor in innovative early-stage tech startups,
while at the same time providing new startup ventures with much-needed
seed capital.
• Make private transactions- That means individuals can make money
transfers without having to explain to a bank why they are sending a large
sum of money, what the sources of the funds are and who they are sending it
to, which can delay the transaction and involve unnecessarily bureaucratic
processes.
CONTD….
• Send non-cash remittances- Another powerful use case for
cryptocurrencies is non-cash remittances. Nigerian blockchain
startup SureRemit, for example, enables its users to send non-
cash remittances from anywhere in the world to selected African
nations.
• New speculating plateform- Many people believe that
cryptocurrencies are the hottest investment opportunity
currently available. Indeed, there are many stories of people
becoming millionaires through their Bitcoin investments.
Disadvantages
• Difficult to understand – Cryptocurrencies are relatively new and come with
a learning curve. People end up investing without proper knowledge and lose
money to something they did not learn about.
• Lack of knowledge – People are not aware of how to use cryptocurrency and
hence open themselves to hacker. The technology is somewhat complex and
therefore one needs to be mindful of it before investing.
• Not accepted widely – Not many websites and companies accept digital
currencies yet. Very few countries have legalized the use of cryptocurrencies.
It makes it impractical for everyday use. Due to lack of acceptance, before
buying or investing online or offline, you need to make sure that it’s accepted
at that place where you want to use it.
• Can lose your wallet – There is a possibility of losing your wallet. If you
have stored the money in the form of digital currency on your phone or
computer, you better remember your password and not lose those devices.
CONTD….
• No way to reverse the payment – If you mistakenly pay someone by
using cryptocurrency, then there is no way to get a refund of the
amount paid. All you can do is to ask the person for a refund and if
your request is turned down, then just forget about the money.
• Uncertainty & Volatility – Since cryptocurrencies are so new, they
are also very volatile. This is one of the main reasons mass adoption
is taking longer than it should. Many corporations don’t want to deal
with a form of money that is going to go through huge swings in
volatility.
• Scaling – Based on the way smart contracts are designed, there is a
limit to the speed and number of transactions it can process at a time
which has hindered the widespread adoption of digital currencies.
Most common Examples
• Bitcoin— The first ever cryptocurrency that started it
all.
• Ripple— Unlike most cryptocurrencies, it doesn’t use
a Blockchain in order to reach a network-wide
consensus for transactions.It utilize a Proof of Work
algorithm.
• Litecoin— A cryptocurrency that was created with an
intention to be the ‘digital silver’ compared to
Bitcoin’s ‘digital gold.
• IOTA— This cryptocurrency’s breakthrough ledger
technology requires the sender in a transaction to do a
Proof of Work that approves two transactions.
CONTD….
• Dash — It’s a two-tier network. The first tier is
miners that secure the network and record
transactions.
• Qtum — It’s a merger of Bitcoin’s and Ethereum’s
technologies targeting business applications.
• Ethereum Classic — An original version of
Ethereum. The split happened after a decentralized
autonomous organization built on top of the original
Ethereum was hacked.
• Bitcoin Cash— A fork of Bitcoin that is supported by
the biggest Bitcoin mining company and a
manufacturer of ASICs Bitcoin mining chips.
Current Market Analysis
Bitcoin
First ‘decentralized’ digital currency. They are digital coins you
can send through the internet.
No one controls it. Bitcoins aren’t printed, like rupee or dollars –
they’re produced by people, and increasingly businesses, running
computers all around the world, using software that solves
mathematical problems.
An anonymous software developer called Satoshi Nakamoto
proposed bitcoin in 2009, which was an electronic payment
system based on mathematical proof. The idea was to produce a
currency independent of any central authority, transferable
electronically, more or less instantly, with very low transaction
fees.
In simple words, bitcoin is an open source software to transfer
money over the internet.
 Features of Bitcoin
• It's is decentralised
• It's easy to set up – set up a bitcoin wallet and you are good
to go !
• It's anonymous
• It's completely transparent - stored in public ledger known
as
• Blockchain
• Transaction fees are minuscule
• It’s fast
• People can’t steal your payment information from
merchants.
• It isn’t inflationary
Bitcoin Status: Worldwide
Bitcoin in India: Present Situation & Scope
• The greatest risk involved in the exchange and trade of Bitcoin
and all such crypto currencies is the lack of regulation. Though
the use of these is not explicitly banned in the country, the
central bank, the Reserve Bank of India (RBI), does not
authorise any payments using Bitcoin. Unlike the Indian Rupee
which is regulated by the RBI there is no approval or currency
control by any monetary authority in the country for the use of
Bitcoin.
• Any discussion related to the future of Bitcoin in India is
certainly a journey into the realm of conjecture. As of now
India’s fiscal health is sound and there is no undue reliance on
such digital currencies but with an increases emphasis on digital
payments this is something that our lawmakers and regulatory
authorities cannot afford to ignore.
Conclusion
• Cryptocurrency is an impressive technical achievement, but it
remains a monetary experiment. Even if cryptocurrencies
survive, they may not fully displace fiat currencies. They
provide an interesting new perspective from which to view
economic questions surrounding currency governance, the
characteristics of money, the political economy of financial
intermediaries, and the nature of currency competition.
References
• Coinpupil.com
• Investopedia.com
• Wikipedia.com
• Mapsofindia.com
• Coinstelegraph.com
• Moneycontrol.com