Cryptocurrency is an emerging form of money that exists digitally and has been making waves all over the world in recent years.
Bitcoin, one of the most known cryptocurrencies, is based on peer-to-peer technologies. They come with no notes, coins, central servers, or controller. Rather than relying on banks, Twitter or PayPal, crypto coin users deal directly with one another.
Unlike other forms of currencies, crypto coins do not have rules about who can hold tokens or use them. The users are in complete control of their tokens and use special codes to protect these tokens from others. With cryptocurrency being a borderless currency, it has become popular all over the world in a short time period. More and more people are getting interested in this currency form and trying to learn more about it.
Cryptocurrency: How Does It Work?
Before jumping into the deep end of the pool, it is essential to understand how cryptocurrency works.
Let’s take a look at Bitcoin, one of the more well-known cryptocurrencies currently. It was invented by Santoshi Nakamotin in 2009 as a way to avoid unreasonable bank charges as well as intermediaries. It allowed people to make payments through wallets that resided in their computers. All they needed to do was enter the Bitcoin address information, and the amount to be transferred and hit send.
New bitcoin is made through a process called Bitcoin mining. A Bitcoin transaction can only be confirmed by Bitcoin miners. They get rewarded for this in the form of Bitcoins. Bitcoin miners can else earn nee Bitcoins by solving cryptographic puzzles that increase in difficulty as they go up the levels. You can now convert INR to Bitcoin.
With Bitcoin trading almost up to $20 billion a year in India alone, it is no surprise that other cryptocurrencies are also gaining ground. Some of the Legal Cryptocurrencies In India include:
It is a decentralized computing platform that encourages the construction and running of Decentralized Applications and Smart Contracts without the interruption, control of intervention of any third party. The applications on this platform use the cryptographic token called ether.
Ripple was launched in 2012 to help banks settle trades across borders at reduced costs and a cloak of anonymity. Since the trust ledger does not require mining, Ripple stands out from other cryptocurrencies. The token used on this platform is called XRP, which were pre-mined until they were launched in 2012
Want to track Ripple prices live? Here’s our price ticker.
Litecoin was one of the first coins launched after Bitcoin. Developed by Charlie Lee in 2011, it uses “script” as proof of work and is not regulated by any third party or central authority.
Tether, one of the more stable coins, has its market value pegged to a currency or an external point. This helps reduce volatility common to cryptocurrencies. Tether and other similar stable coins have helped ease price fluctuations and draw consumers who have stayed away from cryptocurrency to date.
This is an untraceable and private cryptocurrency that was released in 2014. Monero focuses on decentralization and scalability with the help of ring signatures. Its community- based creation created solely based on donation.
Although there are several cryptocurrencies currently being traded, Bitcoin still remains one of the most well-known. In fact, it is considered as the gold standard when it comes to investing in cryptocurrency by most Indians. This has been helped by the lifting of the ban on cryptocurrency by the Supreme Court last month.
Bitcoin was initially introduced as a way to deal with several issues like inflation, income gap, and scalability, and so on. Although cryptocurrency offer anonymity, that is not possible in India since customers need to provide their IDs like PAN card and Aadhar Card to register on platforms that facilitate buying and selling cryptocurrencies. This actually helps the RBI to keep track of financial transactions.
In order to purchase Bitcoins in India, you need to approach one of the Indian Bitcoin exchanges and offer a valid ID to register.
You can look through the order book and make a purchase order. Interestingly, the Indian government took a plunge into the world of digital currency by introducing Lakshmi, a government-stated crypto coin.
Although it has not been published or mined yet since the RB is yet to come to peace with the concept of cryptocurrency. Lakshmi will most likely be a fiat cryptocurrency and be on par with Indian currency. While RBI seems to be on the fence about digital currency things, seem to be turning for the better due to the recent uplifting of the ban. Once price stability has been established, it will pave the path for more stable coins.
At the end of the day, cryptocurrency is currently legal in India. However, it involves a lot of risks and is prone to high fluctuations. E-commerce has been able to help cryptocurrency gain a footing in the current scenario. Who knows, it might even replace the Fiat currency sometime down the road.
[su_note] KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing. [/su_note]
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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