Cryptocurrency is a virtual currency that is secured using cryptography, making it nearly impossible to counterfeit or double-spend. In the technological world, the term ‘blockchain’ has been used numerous times. This is the technology that allows cryptocurrency to be a decentralised network and not have a main governing body. Instead, there’s a multitude of individual computers (miners) that collectively authorize and verify any transactions that are made. Crypto mining is the process of validating and securing a transaction, and adding it to the blockchain (ledger). Miners require puzzle-solving skills and a large amount of computing power. Each miner competes against another in order to solve a given puzzle which verifies the transaction. Once solved, the solution is cross-checked with the other miners’ and then added to the blockchain. If a miner is able to solve the puzzle and verify the payment, they get a reward in the form of a small stake of crypto tokens. There’s a plethora of cryptocurrencies that have made an appearance in the crypto trading market. However, the concept of cryptocurrency was spearheaded by Satoshi Nakamoto’s Bitcoin.
As of today, Bitcoin’s value stands at a staggering ₹4,808,460. Compared to last year, the value increased by 820.4%. There’s an array of factors that contribute to the rise in its value, a major one being the widespread adoption of cryptocurrency (mainly Bitcoin) as a method of payment. At the beginning of 2021, Elon Musk’s Tesla announced that it bought $1.5 billion worth of bitcoin. The company mentioned that it bought bitcoin for “more flexibility to further diversify and maximize returns on our cash.” This explains why it soon plans on accepting bitcoin as a method of payment for its products. Doing so will give the company $1.5 billion worth of liquidity in the cryptocurrency. Elon Musk’s behaviour on social media over the past few weeks explains this move. He was seen posting positive messages regarding bitcoin and other currencies, such as dogecoin, which encouraged many to buy and trade these currencies. By simply adding #bitcoin to his twitter bio, Elon Musk helped push up the price of the cryptocurrency by 20%.
As cryptocurrency continues to grow and become a global phenomenon, its future may be uncertain in India. The Indian government plans on proposing a law in which the bill would criminalise possession, issuance, mining, trading and transferring crypto-assets. The bill would give holders of cryptocurrencies 6 months to liquidate all their crypto-assets, after which the possession would result in hefty penalties. While India plans on a possible ban on cryptocurrency, other countries plan on integrating the concept further into their economy. With renowned fast-food companies such as Starbucks and Burger King announcing their acceptance of cryptocurrency as a method of payment, the overall acceptance of the virtual currency increases. The number of companies that are progressively working on integrating cryptocurrency as a part of their company is exponentially increasing. This makes the future of cryptocurrency much more brighter and promising. However, as a concept, cryptocurrency is subject to major fluctuations. The boom in 2020-2021 may not necessarily make it a safe investment, there are chances that it may see a heavy drop in its value in the near future due to various factors. Nobody can ensure the safety and sustainability of cryptocurrency’s future, although the developments being made in regards to it look very promising.