Cryptocurrency is also called a digital asset in any form of currency that uses cryptography to secure financial transactions. It is a tradable digital asset form of money built on blockchain technology. Bitcoin is the world's first cryptocurrency, which was initiated by Satoshi Nakamoto and developed between mid-2008 and early 2009. As of now, over 18k cryptocurrencies exist in the world. The price of Bitcoin is just $0 when it was gone for mining of the genesis block (First Block) of the blockchain. Bitcoin price has touched a record high of above $60k in May 2021 and is currently traded at around $46k. As per the latest statistics in 2021, a total of 106 million people in the world own cryptocurrencies. Out of the total, 81 million people have created their own bitcoin wallets.
Born and Raise on Crypto
The
world has seen a financial crisis when interest rates were skyrocketed and
lending standards were decreased in 2008-09. Lehman Brothers Holdings Inc,
which was the fourth-largest investment bank in the United States of America,
was collapsed by the end of 2008. After the Lehman Brothers Holdings episode,
first-time people were suspicious of the credibility of the banking
system. Satoshi Nakamoto was proposed the bitcoin cryptocurrency exactly
at the same time which has no government or central bank control as a feature.
In 2020-21, cryptocurrency was the top performed digital investment asset with 800% of returns when compared to the traditional equity market showed returns of just 10% in the same year. There are many reasons for cryptocurrencies are gaining worldwide acceptance.
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People have lost
confidence in the traditional banking system.
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Banks have saved
money but charged for doing to do so, crypto is running on a blockchain P2P
network which doesn’t entertain middlemen when the transaction happened
among the members in the blockchain.
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It works on a
Decentralized network. No third-party control or supervision.
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Easy to transfer
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Easily Exchange the
currencies
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Crypto popularity
is more among the young generations. Some companies offer crypto payment as a
choice to employees.
El Salvador initiative
Central
American nation El Salvador is the first nation in the world to recognize
bitcoin as legal tender. President of El Salvador, Nayib Bukele is almost
acting as CEO for bitcoin. He made an open appeal to the people “buy the dip’
and encourage people to buy bitcoins when the price comes down. El Salvador
amassed around 1800 bitcoins since September 2021. Many nations watched the
developments in El Salvador soon after it announced bitcoin as its official
currency but have not dared. Even though some nations do not recognize crypto,
they are forced to introduce Central Bank Digital Currency (CBDC) in their
nations.
Challenges before the world accepts crypto
Countries
like India changed their stand on cryptocurrencies. In 2018, the Indian
government banned crypto and considered as illegal. The perception of crypto
has changed now. India imposed a 30% of tax on every crypto transaction in the
recent budget. There are a number of challenges ahead for any government to
look into before it accepts crypto as legal tender.
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Government should
make a campaign to understand the specific crypto jargon.
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Infrastructure
should be developed (Crypto ATMs and Banks should be established).
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Government should
alert people about fake crypto exchanges and websites and should control them.
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Bitcoin mining
affects pollution and the green environment. In 2021, Bitcoin mining companies
emit 0.08% CO2 production. El Salvador is doing mining activities with natural
resources like volcano energy.
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In 2021 was a
profitable year for crypto scammers. They stole $14 bn by exposing the flaws in
cryptocurrency.
If
not now, governments in the world should think tomorrow about cryptocurrencies.
Russia is accepting crypto payments after the EU and America imposed Swift
restrictions against Russia. Earlier, in January 2022 Russia has
imposed restrictions on cryptocurrencies. Ukraine accepts crypto donations
to raise funds against Russia. It surpasses $100 million and many people across
the world showed their empathy and solidarity with Ukraine against the Russian
invasion. Crypto is the currency for the next generation.
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