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Cryptocurrency news is all over the internet. The digital currency which was once known for its technical aspect now needs not to be explained with its definition anymore. Since Tesla (Elon Musk’s Electric Vehicle Company) bought $1.5 billion worth of much-talked-about cryptocurrency in India & world, the currency has now become “the talk of the town”.
The way its price has surged to more than $50, 000 (36, 47, 312. 50 INR) last week, we might get more shocks in near future. Moreover, companies engaged in bitcoin exchange find it a revolutionary escalation which they were looking for a long time.
But, the industry cryptocurrency in India & world as well as the entire global financial world has two separate views over this. The majority of worldly organizations are welcoming and appreciating the step taken by Hyperloop’s founder, Elon Musk. On the other hand, India sees cryptocurrency as a tool of fraudulence, money laundering, a tool of inflation, and much more. It would be interesting to know that the Central Bank of India, RBI is planning o launch its own cryptocurrency and that is entirely its concept of decentralization. RBI governor, Shaktikant Das said, “We have major concerns from the financial stability and we have shared it with the government. The government has to consider and take a call”.
(Source- https://economictimes.indiatimes.com/news/economy/policy/rbi-governor-shaktikanta-das-voices-major-concerns-about-cryptocurrency/articleshow/81187214.cms; https://www.moneycontrol.com/news/business/dont-know-which-is-worse-charlie-munger-on-tesla-at-1-trillion-or-bitcoin-at-50000-6571721.html )
It will be interesting to see how India considers the power of Bitcoin and places it in its financial system. The moves of the government will surely be under several lenses.
TimeLine – Cryptocurrency News You may not have Heard Before
Bitcoin is now more than a decade old in 2020, but it has already seen many bumps over the years. Here are a few major glimpses from its timeline that may also tell you why Cryptocurrency meaning would be significant to the world in the future –
2008
This year witnessed two milestones in cryptocurrency. The first one was on 18 August, the domain name bitcoin.org was registered and the second one is on 31 October, the mysterious and so-called father of bitcoin “Satoshi Nakamoto” published a paper that sets the ball rolling.
2009
On 12 January, the first bitcoin transaction was done when Satoshi sent Hal Finney 12 bitcoins.
2010
On 15 August, Bitcoin was hacked and it exposed a major vulnerability in the system. Later that year, the inaugural bitcoin sale took place and for the first time, the monetary value was attached to bitcoin. A bitcoin owner/user swapped 10000 bitcoins for two pizzas. Imagine what he could have done today with those 10000 bitcoins. It would be around £55m (more than five hundred crore INR) today.
2011
Rival cryptocurrencies started emerging, chiefly Litecoin, Namecoin, and Swiftcoin. Also, bitcoin got severe criticism for being used on the so-called, “dark web”, and specifically on sites like Silk Road. Although it proved that no publicity is bad publicity, the price of bitcoin skyrocketed before crashing back down.
2012
Cryptocurrencies started to enter popular consciousness, comprising a fictionalized trial in the third season of US drama The Good Wife, given the title- Bitcoin for Dummies.
2013
Bitcoin users failed to agree on a new rule of transactions and Cryptocurrency pricing, resulting in a bitcoin “fork” and for that moment blockchain was literally split in two. For six hours, two networks were operating simultaneously, with two diverse forms of transaction history causing an inevitable drop in value. In that year, Thailand banned bitcoin, declaring that trading in cryptocurrency is absolutely illegal. Germany’s ministry of finance didn’t accept it as an official currency, rather a “unit of account”, creating the way for a futuristic blueprint to tax bitcoin-based transactions. China also prohibited the use of bitcoin. The first bitcoin ATM got launched in Vancouver, Canada.
2014
Japan-based cryptocurrency trading exchanges went offline and filed for bankruptcy protection, leaving investors out of pocket. In another event, Microsoft allowed users to purchase games with a cryptocurrency.
2015
New cryptocurrencies emerged like Ethereum and Coinbase. Bitsmap, a European bitcoin exchange was hacked but resumed trading a few days later.
2016
Cryptocurrencies were going more conventional. The number of bitcoin ATMs rose from 500 at the starting of the year to 900 by the end of that year. Uber in Argentina started accepting payments in bitcoin.
2017
The “Bitcoin cash hard fork” split bitcoins into two derivatives- BTC and bitcoin cash. Japan passed a law to accept bitcoin legally for payments.
2018
Samsung confirmed it is developing chips to mine coins. Several European governments joined forces to cooperate on cryptocurrency regulation.
2019
Bitcoin prices rose 87% in that year. In Q1 (Jan to March) Bitcoin BTC was relatively stable starting with $3, 717 as a trading price and passed the barrier of $4,000 in the first week of January.
Q2, Bitcoin opened at $4, 125 in April and set various records for reaching prices that have been possible previous over 12 months.
In Q3, Bitcoin opened above the $10, 000 mark and was $10, 442.80 on the first day of July.
On August 7, it reached its highest price ever, $11, 815. 04. Although, the price dropped down to $7994.55 at the end of the third quarter.
In Q4, on December 31, after several ups and downs, the price closed at $7, 100.
(Source- https://thenextweb.com/hardfork/2020/01/14/bitcoin-price-rose-84-2019-q4/ )
2021
Elon Musk and various people started investing in cryptocurrency.
(Source- https://www.telegraph.co.uk/technology/digital-money/the-history-of-cryptocurrency/)
Cryptocurrency in India
People in India are insanely looking for the genuine status of Bitcoin and where does it stand on India’s financial front?
But, before moving to answer these two questions and more, one interesting fact about Bitcoin that you would really like to know is “There are more than 8000 cryptocurrencies currently in circulation.
Recently, cryptocurrency in India & world, as an asset class jumped the mark of $1 trillion in market capitalization.”
Moving towards the answers to the first two questions- In 2018, RBI did impose a ban on cryptocurrency and this circular made the entire Indian crypto community go haywire, and petitions were filed to lift the ban. Two years later, in 2020, the Supreme Court of India ruled out RBI’s ban stating there were no grounds for imposing the ban. Also, RBI announced that it is looking into the need to create a central digital currency (CBDC) for the market regulation which could be a positive move for the Indian crypto market.
India follows China as it’s the second most country after China in Asia, both in terms of bitcoins traded and their value. Industry experts revealed that approximately 7.5 million (75 lakhs) Indians have invested in cryptocurrencies (Remember not just bitcoin). In 5 years i.e. 2015-20, 10, 017 bitcoins worth $94.7 million (6, 87, 14, 65, 145 INR) have been traded during this period by Indians, only after China traded 20, 553 bitcoins worth $181 million (13, 13, 31, 51, 850 INR). As per media reports, a total of 7,236.50 bitcoins were traded in 2020 in India that is an increase of 234% from 2019. The US is the leader of bitcoin trading.
Two fronts over Cryptocurrency in India & World-
There are two fronts on the classification of cryptocurrency in India & world – one says cryptocurrencies to be used as legal tender or currencies can cause problems. Many countries will not replace their sovereign currencies with cryptocurrencies. Another party says there is no harm in using cryptocurrencies as assets. Subhash Chandra Garg, former finance secretary, recently said in a television debate that there is a case for allowing cryptocurrencies as legal tender or assets while disallowing them to be used as sovereign currencies. He advocates for digital currency and said it’s time to replace paper with it. He added the government should structure an apt model for the digital rupee.
Indian crypto experts say the benefits of cryptocurrencies are many and go manifolds as well. Rahul Pagdipati, CEO of ZebPay, says bitcoin has brought decentralized, triple-entry accounting and a value transfer that minimized rent-seeking, resists inflation, and also fights corruption.
Sumit Gupta, CEO of CoinDCX, says bitcoins to be allowed as a value store, and Indians should continue investing. Industry experts predict that cryptocurrency is a $1 trillion industry being run by 340 start-ups.
The pandemic that forced millions to work from home has only focused on empowering the buzz around cryptocurrencies. As Supreme Court has quashed the RBI’s ban on cryptocurrencies in March 2020, crypto exchanges in India will rest in the breath. Within a few months of the Supreme Court’s order, WazirX and CoinDCX, two leading Indian crypto exchanges witnessed a spike in trading volumes.
Cryptocurrency & World- Stay Updated with Latest Cryptocurrency News
What incepted in Japan has now become a premier digital financial transaction system globally in no time. Undoubtedly, it has encouraged different industries in multiple ways, but like every technology, it has its impacts and benefits. Taking a look at both of them becomes mandatory. Here is what you need to know-
Cryptocurrency – Impacts
Global Carbon Emission
In just more than a decade, bitcoin has risen from an avant-garde technology popular within the cryptographer’s community to the world’s ninth most valuable asset by market cap. The dramatic ascent of cryptocurrency in India & world has produced millionaires, redefined money transactions, and led to create a multi-billion dollar industry and all because of its unique decentralized technology.
The computing power needed to support the underlying network of bitcoin now requires as much as the entire country of Argentina. This is causing environmental concern at the global level.
The University of Cambridge’s analysis suggests the bitcoin network uses over 21 terawatt-hours (TWh) every year. It would rank it in the top 30 electricity consumers globally if it were a country.
The energy demands have risen since an unexpected surge in the price of bitcoin took place recently. But, the concerns about the energy demands of bitcoin have been in the industry since its mining started way back a decade ago.
It was noticed by crypto pioneer Hal Finney, when he tweeted about the potential future of CO2 emissions on 27 January 2009. It happened just two weeks later after the first bitcoin transaction was made.
What is important to note here, the more is bitcoin, the more will be energy demands and so is carbon emission. Now, the question arises, what would environmental experts do on such a serious matter. How bitcoin industry will proceed? Will the world be divided into two parts over this?
We just have to wait and see the resolving actions that would be taken in the future?
Cryptocurrency – Benefits
Blockchain technology is one of the unique technologies present today. It’s easy to criticize an emerging technology, but hard to appreciate it. Although, blockchain, cryptocurrency, bitcoin, ethereum, ripple, and many more currencies need no stamp identity. They are well acclaimed and part of billion-dollar trading today. This signifies they are potentially able to benefit us in many possible ways.
Revolutionizing Banking Industry
The banking industry has been using numerous technologies entered and improved the functioning, the most appreciating one was CORE technology. It enabled banks to connect with each other at one time. But, what cryptocurrency in India & world did was exceptional. It became an overnight superstar of the banking industry.
The concept was never-thought-decentralization and just a peer-to-peer kind of transaction. It completely changed the transaction framework, though there are two thoughts over this- one in favor and one in against.
Trading to be Superfast
In the present world of trading, post-trade settlements take upwards of three days. This happens majorly because many intermediaries remain involved in the procedure. If registered on a distributed ledger in place of regular trading and settlement system could be fully automated and superfast, says Matt Higginson, a Boston-based partner at McKinsey & Co. In a decentralized system, exchanges and settlements between counterparties happen immediately. This would make post-trade settlement resolution from days to minutes.
Trading Costs should Go Down
A lesser number of intermediaries mean a lesser number of parties needed to be compensated during the trading procedure. Concluding this suggests lower trading costs for investors. A study done by Oliver Wyman found that IT and operation currently cost the capital market approximately $ 100 to $ 150 billion per year. Additional $100 billion in post-trade and securities service fees. The blockchain theoretically could take to faster and low-cost trading and banking system.
Conclusion
Blockchain definitely edges over its contemporaries with plenty of benefits to humankind in its bucket. Butt, at the same time, its operation certainly leads to cause of concern. Undoubtedly, several industries are relishing and more will be added to the list.
Keeping eye on the industry will be a better idea to watch how things turn now and again in the industry of cryptocurrency in India & world.
