DIG IT A L M ON E Y WI LL

REPL A C E P A P ER M O N EY
YK A CH A TTE R JE E, C L AS S XI
PRESENTED BY KRITT
L RE SID E NT IA L SC HO OL
SAI INTERNATIONA
 CERTIFICATE

This is to certify that Krittyka Chatterjee , student of class

11 C has successfully completed her Economics project on
“Cryptocurrency” under the guidance of Mr. Pinaki Modak .

Signature of teacher Signature of student

 TOTAL TOPICS TO BE DISCUSSED
Sl . No. Sub Topics Page Term Sl . No. Sub Topics Page TERM
no. no.
1 Introduction 1 1 7 Mining 9 2

2 Short note / details on the topic 2 1 8 Demand and supply 10 2

3 Statistical Data 3 1 9 Cost of production 11 2

4 Advantages and disadvantages of the 4-5 1 10 Interest according to regions 12 2

event

5 Conclusion 6 1 11 Cryptocurrency vs Traditional 13 2

currency

6 Blockchain 7-8 2 12 Criticism 14 2

TERM I
TABLE OF CONTENTS:-

• INTRODUCTION
• SHORT NOTE / DETAILS ON THE TOPIC
• STATISTICAL DATA
• ADVANTAGES AND DISADVANTAGES OF THE EVENT
• CONCLUSION
 INTRODUCTION
ELECTRONIC MONEY OR BETTER KNOWN AS E-MONEY IS THE MODERN FORM OF MONEY IN WHICH ALL MONETARY
TRANSACTIONS ARE MADE ELECTRONICALLY. PILES OF CURRENCY NOTES ARE REPLACED BY TINY SMART CARDS,
WHICH NOT ONLY PROVIDE US MONEY BUT PROVIDE A LOT OF SERVICES. CONCEPT OF E-MONEY IS STILL YOUNG BUT
IT'S VERSATILITY AND RELIABILITY HAS MADE IT BIG HIT. COMPUTER HAS REVOLUTIONIZED HUMAN LIFE. USE OF
INTERNET OPENED NEW DIMENSIONS IN COMPUTER USE. TODAY IT IS BEING USED IN EVERY FIELD, IN EVERY PART OF
WORLD.

• USE OF ELECTRONIC DATA INTERCHANGE (EDI) AND ELECTRONIC FUNDS TRANSFER (EFT) IN LATE 1970S, WERE
AMONG THE INITIAL ATTEMPTS TO REALIZE THE DREAM OF ELECTRONIC MONEY. LATER USE OF INTERNET GAVE AN
UNIMAGINABLE BOOST TO THE USE OF COMPUTER FOR MONETARY TRANSACTIONS.

• TODAY, 90% OF TOTAL MONETARY TRANSACTIONS IN USA ARE DONE THROUGH COMPUTER BASED PAYMENT
SYSTEM. THIS FACT IS ENOUGH TO PROVE THE INCREASING POPULARITY OF E-MONEY OVER CASH MONEY.

• ADVANCES IN VARIOUS TECHNOLOGICAL AREAS HAVE MADE THE WIDESPREAD USE OF ELECTRONIC CASH
ECONOMICALLY VIABLE, SPURRING INTEREST IN E-MONEY. 
 SHORT NOTE ON E MONEY :-
At the beginning of the cryptocurrency boom, cryptocurrency
seemed to be the unquestioned leader. Up until early this year,
cryptocurrency accounted for the vast majority of the industry’s
market capitalization; then, in a span of just weeks, ethereum, A report by futurism, highlights some of the possible outcomes,
ripple, and other currencies rushed to catch up. While should cryptocurrencies surpass fiat currencies at some point
cryptocurrency is still in the lead, the rapid turnover in the industry in the future. One important consideration is that cryptocurrencies
has some analysts debating if cryptocurrencies are actually cannot be manipulated quite as easily as fiat currency, largely due
currencies. to their decentralized and unregulated status. Beyond that,
cryptocurrencies could better support the concept of a 
Some are predicting that even bigger changes could be ahead.
universal basic income than fiat currencies would. As a matter of
Among them? The idea that cryptocurrencies could come to fact, some programs have already experimented with the use of
replace cash entirely. cryptocurrencies as means of distributing a universal basic income.

Further, cryptocurrencies could help to get rid of intermediaries in everyday transactions. This could cut costs for
businesses and help out consumers.
Statistical data on the recent use of e money
ADVANTAGES OF DIGITAL MONEY :-
E-MONEY HAS MANY ADVANTAGES OVER TRADITIONAL CASH SYSTEM, WHICH MAKES IT POPULAR. SOME OF
THE BENEFITS OF IT ARE AS FOLLOWS.

• FAST TRANSACTION.
• NO NEED TO CARRY PILE OF CASH,
JUST HAVE YOUR SMALL CHIP CARD.

• RELIABLE AND SECURE.

• NO FEAR OF THEFT OR ROBBERY.
• ROUND THE CLOCK BANKING FACILITY.
• BETTER INFORMATION ABOUT YOUR ACCOUNT DETAILS.
• MORE PERSONALIZED BANKING SERVICES AND INSTRUMENTS.
 DISADVANTAGES OF DIGITAL MONEY:-
But e-money is not free from loop holes. As all your details are made online, some intruders may get some gaps in security and can
give you huge losses. There are number of issues which are required to be resolved completely before seeing e-money swapping
traditional cash system completely.
Most important of these are -

• Issue of data security and threat of fraud.

• Issue of using e-money in all parts of world
especially in underdeveloped countries.

• Issue of unifying the mode of transaction as incompatible mode of

money transfer may cause problems.

• Issue of cheap e-banking service.

• Privacy of personal information will also be an important issue.
• We can not imagine e-money as complete replacement for the cash money without resolving these issues. These are certain issues
which need to be resolved to get total acceptance for e-money.
Lack of a standard e-banking system in various parts of world is also a big hurdle in complete
acceptance of e-money.
 CONCLUSION :-
• History of payments systems suggests that new payments methods do not completely replace old ones because the old methods
may continue to have valuable and unique features.

• At the end of the day, it is clear that cryptocurrencies definitely have the potential to change the world of business as we know
it. On the other hand, it wouldn’t be the first time to see such a massive potential wasted. Be that as it may, as more and more
companies hop on this bandwagon, we will see how this situation further develops.

• While it is more than clear that digital money offers numerous benefits that venture capital does not, some business owners
aren’t comfortable with making this switch just yet. In other words, obstacles that digital currencies have to overcome in order
to become ‘mainstream’ are not just economic but mental, as well.

• Of course, there are also some huge challenges and concerns with this scenario. If cryptocurrencies outpace cash in terms of
usage, traditional currencies will lose value without any means of recourse. Should cryptocurrencies take over entirely, new
infrastructure would have to be developed in order to allow the world to adapt. There would inevitably be difficulties with the
transition, as cash could become incompatible quite quickly, leaving some people with lost assets. Established financial
institutions would likely have to scramble to change their ways.

• It is important to note that while the initial cryptocurrency-mania saw quite a few businesses offer to accept the
cryptocurrency, that list has steadily dwindled brining back the skepticism about its use a medium of exchange.

THE END!
THANK YOU!
TERM
II
CONTENT:
• BLOCKCHAIN
• MINING
• DEMAND AND SUPPLY
• COST OF PRODUCTION
• INTEREST ACCORDING TO REGIONS
• CRYPTOCURRENCY VS TRADITIONAL CURRENCY
• CRITICISM
BLOCKCHAIN
• SITES OR USERS USING THE CRYPTOCURRENCY SYSTEM
ARE REQUIRED TO USE A GLOBAL DATABASE CALLED THE
BLOCKCHAIN.

• THE BLOCKCHAIN IS A RECORD OF ALL TRANSACTIONS

THAT HAVE TAKEN PLACE IN ANY OF THE
CRYPTOCURRENCY NETWORK (SAY CRYPTOCURRENCY
NETWORK). IT ALSO KEEPS TRACK OF THE RESPECTIVE
CRPTOCURRENCIES WHEN GENERATED.

WITH THESE TWO FACTS, THE BLOCKCHAIN IS ABLE TO KEEP

TRACK OF WHO HAS HOW MUCH MONEY AT ALL TIMES.
MINING
 DEMAND
• WHILE CRYPTOCURRENCY HAS YET TO FIND FAVOR AS A MEDIUM OF
EXCHANGE, IT HAS ATTRACTED THE ATTENTION OF RETAIL INVESTORS.
THE LOCUS OF CRYPTOCURRENCY’S DEMAND SHIFTS BASED ON
ECONOMIC AND GEOPOLITICAL CONSIDERATIONS. FOR EXAMPLE,
CHINA’S CITIZENS MAY HAVE REPORTEDLY USED THE CRYPTOCURRENCY
TO CIRCUMVENT CAPITAL CONTROLS IN 2020.

•  CRYPTOCURRENCY HAS ALSO BECOME POPULAR IN COUNTRIES WITH

HIGH INFLATION AND DEVALUED CURRENCIES, SUCH AS VENEZUELA. IT
IS ALSO POPULAR WITH CRIMINALS WHO USE IT TO TRANSFER LARGE
SUMS OF MONEY FOR ILLICIT ACTIVITIES. FINALLY, INVESTOR DEMAND
FOR THE CRYPTOCURRENCY HAS ALSO RISEN WITH INCREASED MEDIA
COVERAGE. 

• ALL OF THIS MEANS THAT SHRINKAGE IN SUPPLY HAS COUPLED WITH A

SURGE IN DEMAND, ACTING AS FUEL FOR CRYPTOCURRENCY PRICES.
ALTERNATING PERIODS OF BOOMS AND BUSTS HAVE BECOME A
FEATURE OF THE CRYPTOCURRENCY ECOSYSTEM.
 SUPPLY
• THE SUPPLY OF AN ASSET PLAYS AN IMPORTANT ROLE IN DETERMINING ITS
PRICE.

• A SCARCE ASSET IS MORE LIKELY TO HAVE HIGH PRICES, WHEREAS ONE

THAT IS AVAILABLE IN PLENTY WILL HAVE LOW PRICES.
CRYPTOCURRENCY’S SUPPLY HAS BEEN DWINDLING SINCE INCEPTION.

• THE CRYPTOCURRENCY’S PROTOCOL ONLY ALLOWS NEW

CRYPTOCURRENCYS TO BE CREATED AT A FIXED RATE, AND THAT RATE IS
DESIGNED TO SLOW DOWN OVER TIME. THUS, THE SUPPLY OF
CRYPTOCURRENCY SLOWED FROM 6.9% IN 2016 TO 4.4% IN 2017 AND 4%
IN 2018.

• CRYPTOCURRENCY HALVING EVENTS, WHICH OCCUR EVERY FOUR YEARS,

GENERALLY CORRESPOND TO A SIGNIFICANT BUMP IN ITS PRICES BECAUSE
IT MEANS THAT THE CRYPTOCURRENCY’S SUPPLY HAS BEEN REDUCED. 
COST OF PRODUCTION
• JUST AS FOR OTHER COMMODITIES, THE COST OF PRODUCTION PLAYS AN IMPORTANT ROLE IN DETERMINING THE PRICE OF
BITCOIN. ACCORDING TO RESEARCH, BITCOIN’S PRICE IN CRYPTO MARKETS IS CLOSELY RELATED TO ITS 
MARGINAL COST OF PRODUCTION.

• FOR BITCOIN, THE COST OF PRODUCTION IS ROUGHLY A SUM OF THE DIRECT FIXED COSTS FOR INFRASTRUCTURE AND ELECTRICITY
REQUIRED TO MINE THE CRYPTOCURRENCY AND AN INDIRECT COST RELATED TO THE DIFFICULTY LEVEL OF ITS ALGORITHM. 
BITCOIN MINING CONSISTS OF MINERS COMPETING TO SOLVE A COMPLEX MATH PROBLEM—THE FIRST MINER TO DO SO WINS A
REWARD OF NEWLY MINTED BITCOINS AND ANY TRANSACTION FEES THAT HAVE ACCUMULATED SINCE THE LAST BLOCK WAS
FOUND.  

• ARRIVING AT A SOLUTION TO THE PROBLEM REQUIRES BRUTE FORCE IN THE FORM OF CONSIDERABLE PROCESSING POWER. IN
MONETARY TERMS, THIS MEANS THE MINER WILL HAVE TO SPEND MONEY ON RACKING MINING MACHINES EQUIPPED WITH
EXPENSIVE PROCESSORS. THE BITCOIN-MINING PROCESS ALSO INCURS COSTLY ELECTRICITY BILLS.

• ACCORDING TO ESTIMATES BY SOME SITES, ELECTRICITY CONSUMPTION FOR THE BITCOIN-MINING PROCESS IS EQUAL TO OR
MORE THAN THAT OF ENTIRE COUNTRIES.4 AN INDIRECT COST OF BITCOIN MINING IS THE DIFFICULTY LEVEL OF ITS ALGORITHM.
THE VARYING DIFFICULTY LEVELS OF BITCOIN’S ALGORITHMS CAN HASTEN OR SLOW DOWN THE RATE OF BITCOIN PRODUCTION
AND AFFECT ITS OVERALL SUPPLY, THEREBY AFFECTING ITS PRICE. 
INTEREST BY REGIONS
CRYPTOCURRENCY VS TRADITIONAL CURRENCY
CRITICISM ON CRYPTOCURRENCY

ENERGY CONSUMPTION

• BITCOIN HAS BEEN CRITICIZED FOR THE AMOUNTS OF

ELECTRICITY CONSUMED BY MINING.

• IN 2013, IT IS ESTIMATED ELECTRICITY USE TO BE ABOUT

40.9 MEGAWATTS (982 MEGAWATT-HOURS A DAY)

• IN NOVEMBER 2017, THE GLOBAL BITCOIN MINING

ACTIVITY WAS ESTIMATED TO CONSUME 3.4 GIGAWATTS.