What is cryptocurrency?
Cryptocurrency is a digital medium used in transactions and is cryptographically secure. It is distributed, peer to peer, decentralized and anonymous. They are based on blockchain technology to gain decentralization, transparency, and immutability. The best part of this technology is that it is not controlled by any central authority. Hence the government can not interfere or control this currency system. In cryptocurrency, there is no middle thing like a bank and the transaction can be completely anonymous.
Cryptocurrencies have faced criticism due to several reasons, due to their use for illegal activities, exchange rate volatility, and vulnerabilities to the infrastructure underlying them. But, they are also praised for their portability, divisibility, inflation resistance, and transparency.
Certain experts believe that blockchain and related technology will disrupt many industries, such as finance and law.
Crypto markets have always been quite volatile, dictated by politics and technology. There are close to 1,400 cryptocurrencies that have combined worth of 300 billion dollars. And by some estimates, the cryptocurrency industry would be worth 5 trillion dollars by 2022. But since this market is kinda ever-changing, the number depends on the source of news you listen to.
The Bitcoin
Bitcoin was launched in 2009 by an individual or group which was known by the pseudonym “Satoshi Nakamoto.” As of Nov. 2019, there were over 18 million bitcoins in circulation with a total market value of around $146 billion which is astonishing. Bitcoin is commonly traded under the symbol BTC.
Bitcoin has been the leading one in the world of cryptocurrency and has grown tremendously in past quarters. In 2017, bitcoin tripled in value. But there is a certain skepticism regarding the cryptocurrencies that they have always been associated with the dark web and various facinorous marketplaces like Silk Road. Such beliefs became more prominent due to criminal cyber activities. There are some obstacles for cryptocurrencies due to their usage in the dark web and other criminal activities, and if the Government puts regulations on using them at retail stores and banks their value may ultimately collapse. But since it’s the people who create the value of a currency there are hardly any chances of Bitcoin collapsing.
Bitcoin was a boon to the anonymous world and also better due to the distributed database. The current scenario of cryptocurrencies is not as good as the Bitcoin price and the other Crypto values in the market as steeply falling. Bitcoin price hit its highest in December 2017 and ever since then it has been decreasing. Though it is still very high than it was 3 years ago. Sometimes the market moves without any clear reason but there could be a few explanations to the scenario.
Bitcoin and India
Back when bitcoin was invented, India was the first country to acknowledge it as an alternative monetary system. In 2016, due to demonetization Indians realized that cash is unreliable. At that time, a lot of people turned to bitcoin. A considerable number of people were using bitcoin at that time also. Bitcoin provides people a safer system for the public to invest money.
The large size of the Indian population still does not own a bank account. Bitcoin allows them also to make transactions without a bank account. About 500 plus merchants in India and five large enterprises including Dell accepted payments in cryptocurrency. Though cryptocurrency is still not very popular in India, most people still prefer paper money. The Indian government doesn’t seem to be much happy with cryptocurrency and does try to interfere and put a ban based on some acts such as the Prevention of Money Laundering Act (PMLA).
The downfall of Bitcoin
Government regulations in China Japan and Korea could have a minor effect here. But the major downfall is considered due to the greed of the people. Initially, people invested in Bitcoins to become rich and they purchased it at every new height. When in 2017 they succeeded and the prices went very high they pulled their presence away from the market and the market fell. And most of the new entrants burnt their fingers. Considering the nature of the crypto world an important thing to be noted is that the values are now nearly stable and not falling beyond a certain threshold and such growth can certainly make this stronger in near future.
Shall one buy bitcoin?
Looking at the positive side this situation can be used to buy Bitcoins. Currency the market is gloomy but its future forecast is optimistic. Moreover, it is not the first time Bitcoin has lost so much value. The adoption of this technology is continuing to grow and the prices of cryptocurrencies will get stable once there is a sufficient number of people using it on regular basis and also the long term growth of the Crypto market will sustain the present losses.