The concept of cryptocurrency or Internet Money is tough to recognize and accept, but tranquil to use. It is contemplated hard, mostly because it is completely different from the conventional currencies that people are using for ages. The most stirring part of the usage of the new form of internet money is that there is no mainstream or central authority like Central or Reserve Banks that governs and checks the flow of these currencies. It is completely decentralized. Over the years, bitcoin, as a cryptocurrency has been unhinged leading to investors hauling away from investing in the same.
As India is in the technical era, techno-Indians speak, capitalise, and own Bitcoin. One of the most prevalent terms used by the world is “Cryptocurrency”. As E-Commerce is becoming the most essential part, internet sales are thriving with more Techno-Indian customers. Bitcoin came into being in later 2009 as a medium of online transactions. The gap between buyer and seller was spanned by the financial institutions. They served as a reliable third party to process E-Payments. Even though the gap was spanned effectively, there was always a dependency factor for both the buyer’s and seller’s trading activities. This dependency turns out to be a factor accountable for the creation of Cryptocurrency.
Cryptocurrency refers to “a digital asset created to work as a means of altercation using cryptography to protect the transaction and to govern the creation of extra units of the currency”. The cryptocurrency was first ever used in the year 2010 by Laszlo Hanycez, Florida. In 2017, the popularity of the use of Cryptocurrency increased rapidly, People started to spend a large sum of money that had no history of creating revenue. Crores of money were capitalised into further 1000 new digital coins.
The technology behind Crypto functioning is Blockchain. A blockchain is a public record that keeps records of all prior Bitcoin transactions. These data units or blocks use cryptographic validation to connect themselves together. The whole network is used to monitor and authenticate both the formation of native tokens through mining and the transfer of tokens/coins amongst users.
Miners are persons or organizations who, with the use of dominant computers, carry out the mining process. Mining is the process by which transactions are confirmed and added to the public ledger, blockchain, and also the medium through which new coins are released. The mining procedure involves gathering recent transactions into blocks and discovering solutions to a computationally tough puzzle. The successful miners who decipher the puzzle get to place the next block on the blockchain and are compensated. The reward is twofold. The newly minted tokens/coins and the fees paid by users sending transactions are rewarded to the miners for their determinations.
Since Bitcoin’s commencement in January 2009, there have been numerous other projects that used similar ideas as Bitcoin. These are collectively referred to as “cryptocurrencies”. Some of these projects are not essentially geared towards the application of currency but they are all “tokens”, like Bitcoin. They can be transmitted from one user to another, and can generally be traded on an exchange.
As per RBI (Regulatory Authority) Circular, administered by the banks and other financial institutions, trading Cryptocurrency comprising Bitcoin is prohibited. This has occasioned zero trade amongst the buyer and seller through any type of dealing with cryptocurrency or crypto assets. Additionally, the authorities have also emphasized the risk related to virtual currencies. Though the lawful status of bitcoin varies considerably from one country to another country, in India there are some lawful restrictions on the usage of virtual currencies. In India, there are 11 exchange platforms obtainable to trade Bitcoin though it is not controlled by RBI.
RBI’s and Yes Bank in an email to its consumers said that "We forbid the use of YES BANK - Debit Card, Credit Card, Net Banking, Mobile Banking, Digital Wallet, Prepaid Cards and Travel Cards towards buying of or trading in virtual currencies. The central bank (RBI) issued a press release that said, “Technological innovations, comprising those essential virtual currencies, have the potential to mend the efficiency and inclusiveness of the financial system. However, Virtual Currencies (VCs), also variously referred to as Cryptocurrencies and crypto assets, raise anxieties towards consumer security, market veracity, and money laundering.
The stakeholders in India have recommended the usage of Bitcoin will chiefly have a negative impact on the country but it may have a positive impact on the citizens of India who are rational and have peculiar consumer pattern behaviour. It can be in expressed as, even though Cryptocurrency has its disadvantages as every new technology does.
Cryptocurrency has the potential to substitute the outmoded monetary system. In order to accept this phase of Cryptocurrency, it must first advance and accept a safe network of currency exchange. According to the findings of the current study, if cryptocurrencies are in the form of Lakshmi Coin then society can be inspired to make investors adapt progressively which will, in turn, pave a way to speedy progress in the usage of Cryptocurrency. This will help India to reach the subsequent platform of E-commerce. Indians are to be advantaged by Bitcoin, but it may not be the same for the nation as a whole.