The concept of Cryptocurrency

1. Cryptocurrency
Mr. Basavaraj M. Naik M.Com, UGC NET, KSET
Teaching Assistant
Department of Studies in Commerce
Rani Channamma University Belagavi,
Post-Graduate Centre, Jamkhandi

2. Cryptocurrency
• A cryptocurrency or crypto, is a virtual currency secured by cryptography. It is designed
to work as a medium of exchange, where individual ownership records are stored in a
computerised database.
• The defining trait of a cryptocurrency is that they are not issued by the government
agency of any country making them immune against any interference and manipulation
from them.

3. Latest Developments
regarding Cryptocurrency in India –
• The Cryptocurrency and Regulation of Official Digital Currency Bill
2021 is likely to be introduced in the winter session of the
Parliament. It is a bill that would regulate Cryptocurrency in India.
On December 7 2021, Finance minister Nirmala Sitharaman
asserted that the the proposed Central Bank Digital Currency will
not boost cryptocurrency in India.

4. Definition of Cryptocurrency
• In simplistic terms, Cryptocurrency is a digitised asset spread
through multiple computers in a shared network. The
decentralised nature of this network shields them from any
control from government regulatory bodies.
• The term “cryptocurrency in itself is derived from the encryption
techniques used to secure the network.
• 1 bitcoin- 27,98,671.46 Indian Rupees

5. • As per computer experts, any system that falls under the category of
cryptocurrency must meet the following requirements.:
• Absence of any centralised authority and is maintained through
distributed networks
• The system maintains records of cryptocurrency units and who owns
them
• The system decides whether new units can be created and in case it
does, decided the origin and the ownership terms
• Ownership of cryptocurrency units can be proved exclusively
cryptographically.
• The system allows transactions to be performed in which ownership of
the cryptographic units is changed.

6. Types of Cryptocurrency
• The first type of crypto currency was Bitcoin, which to this day
remains the most-used, valuable and popular. Along with Bitcoin,
other alternative cryptocurrencies with varying degrees of
functions and specifications have been created. Some are
iterations of bitcoin while others have been created from the
ground up

7. • Bitcoin was launched in 2009 by an individual or group known by the pseudonym
“Satoshi Nakamoto. As of March 2021, there were over 18.6 million bitcoins in
circulation with a total market cap of around $927 billion.
• The competing cryptocurrencies that were created as a result
of Bitcoin’s success are known as altcoins. Some of the well known altcoins are
as follows:
• Litecoin
• Peercoin
• Namecoin
• Ethereum
• Cardana

8. How it works?
• Cryptocurrencies don't have a central issuing or regulating
authority, instead using a decentralized system to record
transactions and issue new units.
• Decentralized exchanges (DEX) type of cryptocurrency exchange
which allows for direct peer-to-peer cryptocurrency transactions
to take place online securely and without the need for an
intermediary.

9. Is cryptocurrency regulated by the
government?
• Unlike dollar bills and coins, cryptocurrencies are not issued or
backed by the U.S. government or any other government or
central bank. The lack of a physical token to count and hold may
confuse some.

10. Who regulates cryptocurrency in India?
• One important thing that remains to be seen is who will regulate
cryptocurrencies. The Reserve Bank of India (RBI) seems to be the
most logical option but has expressed intentions of introducing its
own crypto. The other possible option among the existing
organisations is SEBI.
• Cryptoassets will be dealt with the existing crypto exchange
platforms which will be regulated by Securities and Exchange
Board of India (SEBI).

11. Is it safe to buy cryptocurrency?
• The money you put into Bitcoin is not safe from value fluctuations.
Bitcoin is a volatile investment. If you're looking for a “safe”
investment with guaranteed returns, then don't invest in Bitcoin

12. How do beginners buy bitcoins?
• You must add a bank account, debit card, or credit card to make
your first bitcoin purchase on most exchanges. Adding a bank
account is recommended for buying large amounts of bitcoin as
the transfer fees tend to be lower. Credit and debit cards are only
recommended for smaller purchases as they carry higher fees.

13. Why is buying Bitcoin so difficult?
• eason why cryptocurrency is complicated to purchase
is government. Think about it. The entire system was designed to
make it so that anyone with a computer could buy and sell a
digital asset. It takes almost no programming expertise to set up a
website to sell, art.

14. Who sets the price of bitcoin?
• What determines bitcoin's price?
• The price of a bitcoin is determined by supply and demand. When
demand for bitcoins increases, the price increases, and when
demand falls, the price falls.

15. Cryptocurrency has the following advantages
• Funds transfer between two parties will be easy without the need
of third party like credit/debit cards or banks
• It is a cheaper alternative compared to other online transactions
• Payments are safe and secured
• Modern cryptocurrency systems come with a user “wallet” or
account address which is accessible only by a public key and
pirate key. The private key is only know to the owner of the wallet
• Funds transfer are completed with minimal processing fees.

16. Cryptocurrencies have the following disadvantages.
• The almost hidden nature of cryptocurrency transactions makes
them easy to be the focus of illegal activities such as money
laundering, tax-evasion and possibly even terror-financing
• Payments are not irreversible
• Cryptocurrencies are not accepted everywhere and have limited
value elsewhere
• There is concern that cryptocurrencies like Bitcoin are not rooted
in any material goods. Some research, however, has identified that
the cost of producing a Bitcoin, which requires an increasingly
large amount of energy, is directly related to its market price.

17. How much does it cost to start
cryptocurrency?
• Depending on your needs, creating a cryptocurrency can cost
anywhere between $2000 and $5000. If you need a feature-rich,
custom-built cryptocurrency, it can go as high as $5,000 or more.

18. Is Cryptocurrency is legal in India?
• Currently, there is no regulation or any ban on the use of
cryptocurrencies in the country.

19. Want to create your own
cryptocurrency?