Earn online through cryptocurrency
A new digital or virtual currency called crypto currency has taken the world by storm. Though in the initial stages with a lot of governments still undecided whether to legalise the same, it is certainly poised to change the way currencies are traded.
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. (https://www.investopedia.com/terms/c/cryptocurrency.asp)
The process involves using It uses cryptography to secure and verify transactions and exercises stringent control on new units of a certain cryptocurrency.
Advent of technology in the early 90s did see a concerted focus on creating digital currencies but due to various issues like lack of secure processes, frauds, financial issues and basically lack of clarity and attempts to make a quick buck led to failure. Mainly the fact that they used a third party approach, the sponsoring companies facilitated the transactions and their viability depended on the financial health of the sponsoring company. Some examples are Beenz, Digicash etc.
Early 2009 saw the advent of an anonymous programmer Satoshi Nakamoto who with his team of programmers introduced Bitcoin, a ‘peer-to-peer electronic cash system which involved a decentralised transactions, ie without servers and no central controlling authority. It was a direct sale and purchase with the help of block chain, akin to a public ledger of all transactions open to everyone. The digital wallet addresses of the seller and buyer are involved and every deal specifies the same with the number of coins involved in the transaction. Currently, it is the top cryptocurrency
Subsequent to bitcoin new players like Litecoin, Ripple, Ethereum etc are in the fray though they have not gained much traction and not traded universally yet.
The functional use of crypto currency
Purchase of goods
A lot of merchants now accept Bitcoin as a mode of payment. They range from small time retailers to the large players like Overstock. It can be used to pay for daily purchases to big transactions like jewellery, hotel reservations and so on.
Instrument of Investment
The zooming value of Bitcoin has opened up the possibility of creation of many millionaires. These are now felt to be red hot avenues of investment. Bitcoin has seen the birth of new millionaires. In 2016 it was valued at $800, in 2017 around $7000, and currently $10660 that is around 7.86 lakhs INR. However on the cautionary side, it has seen massive upswings and downswings which make it a high risk investment
Ethereum, perhaps the second most valued cryptocurrency, is now valued at $353 ,ie around 20,000 INR.
In the earlier days, Bitcoins could be mined using a computer. Seeing the potential companies invested in industrial mining hardware setting up extensive manufacturing servers involving extensive use of electricity and infrastructure. JHowever the latest trend is mining through mobiles with minimal use of data and battery and certainly no overhead cost like Pi Network. Other crypto currencies for beginners are Dogecoins and Litecoins.https://prasat9.com/ways-to-earn-online/
Some common cryptocurrencies
- Bitcoin — The pioneer who started the revolution.
- Ethereum — A programmable currency that doesn’t work with Bitcoin.
- Ripple — Does not use Blockchain, rather an iterative consensus process is implemented. It is faster than Bitcoin but prone to being hacked
Some other cryptocurrencies are
Are cryptocurrencies legal in India
India has entered the realm of cryptocurrencies with the recent judgement of the Supreme Court which legalised Bitcoins. Of course the regulators are not too happy as these are decentralised and self sustaining with no central agency controlling it. The legal frameworks are being explored.
Issues with Crypto currency
No government Backing
No government Backing
They are not backed by the government or cushioned with gold reserves. If the company which is providing the same collapses, then your money is as good as gone. The government might not be able to retrieve the situation.
Unregulated Currency. As the cryptocurrency is unregulated it is prone to wild swings both up and down which makes it a high risk investment susceptible to manipulations. A cryptocurrency’s value changes constantly. Its value can change by the hour.
No guarantee of profitability. There are no promised returns. Bitcoin has ruined some people though others have profited from it. It certainly is not safe investment where there is no regulation, no control and where it is prone to manipulation.
No legal protection.
Once a payment is made, it is gone unless the seller sends it back. And it is very difficult to ascertain the whereabouts and the antecedents of the buyer and the seller.
The information of the holdings is in the public domain. It could be the value of the transaction, the wallet addresses. These could be used to identify the parties involved
Risk of Hacking.
Being primarily online, there is a risk of the online wallet being hacked and the currencies illegally transferred.
This is an area which has raised a lot of concerns. Decentralised, potential for anonymous usage has raised concerns on the same being used for money laundering, tax evasion and terrorist activities.
By far the biggest issue in the cryptocurrency market is the excessive volatility. The prices of cryptocurrencies on exchange platforms rise and fall dramatically over a short period of time. The major contributor to the excessive volatility are the ‘whale activities’. Whales are individulas with large holding of cryptocurrency who can swing the market by manipulating prices
Cryptocurrencies have been subjected to attacks by these cyber criminals resulting in loss of millions of dollars. Though there have been attempts to make the wallets secure by storing in off line wallets. These measures though helpful create new hurdles in smooth and quick operations.
The same is difficult due to lack of regulations and control.
Future of cryptocurrency.
Cryptocurrency is digital money. That means there’s no physical coin or bill — it’s all online. It is a peer to peer business without a central agency like a bank to interfere or regulate the same. The market of cryptocurrency is growing every day. It does suffer from regulatory and other issues. The main cause are the infancy stage of the market, lack of understanding and the novelty of the concept. The cryptocurrency market is currently valued at a market capitalisation of $237 billion with Bitcoin being traded as the best crypto currency.