Crypto currenciesDate: 20 October 2019 Tags: IT, Mobile & Computers
Finance minister Nirmala Sitharaman has cautioned aginst use of crypto currencies on an official basis, citing various threats posed by it.
The virtual currency came into spotlight after Facebook has planned to launch its virtual currency known as Libra.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
The decentralized control of each cryptocurrency works through distributed ledger technology,known as blockchain, that serves as a public financial transaction database.
Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized cryptocurrency.
Advantages of cryptocurrency
There is no possibility for development of inflation in the system
Peer-to-peer cryptocurrency network
Transactions are made by hundreds of distributed servers. Neither banks or taxes, nor governments can control the exchange of money.
Unlimited possibilities of transaction
Each of the wallet holders can pay to anyone, anywhere and any amount. The transaction can not be controlled or prevented.
It is completely anonymous and at the same time fully transparent.
No chances to use some personal data for fraud.
Drawbacks of cryptocurrency
Large risks of investing in cryptocurrency that should be considered in the medium and long term.
It is not considered a universal curency due to non-recognition by official sources.
They can be used to finance illegal activities such as terrorism.
A blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography.
Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data.