Cryptocurrency is a digital asset that is used primarily as a means of transacting financial transactions, controlling the creation of additional assets, and verifying the transfer of any asset with the help of powerful cryptographic technology. It is also known as digital currency or a form of virtual currency. Unlike the central banking system, it is a decentralized control and financial transaction system that operates primarily through a blockchain used for financial transactions.
The first decentralized virtual currency developed in 2009, Bitcoin is known as a virtual financial unit and operates independently without the assistance of any central bank or administrator. Since then, about 4000 altcoins of various forms of bitcoin have been created. Bitcoin is considered a peer-to-peer electronic cash system where users make direct transactions without any intermediaries.
A blockchain is a data file consisting of numerous blocks that records all previous bitcoin transactions and creates new ones. The normal average time between each block is about 10 minutes. The most frequent use of Bitcoin is supported by an external software called Bitcoin Wallet. Using this software, one can easily store, accept and manage Bitcoin unit transactions. To perform transactions using Bitcoin, you need to have an account at any of the Bitcoin exchanges around the world and transfer Fiat currency to that account. This way the account holder can make future transactions using these funds. In addition to Bitcoin, other sources of cryptocurrency are Petro, which is mainly used for oil and mineral reserves.
There are some advantages and disadvantages to using digital currency. The main advantages of using virtual currency are as under: –
Provides a quick clarity level: –
Bitcoin typically works with a laser called a blockchain that records and monitors every transaction. Once a transaction is made and recorded on this ledger, it is considered stable. These transactions can be further verified at any time in the future and therefore, in addition to this, it also ensures security and confidentiality for all transactions made through a specific account.
• Fast processing and portable use: –
Billions of dollars of bitcoin can be easily transferred from one place to another without any identification with the help of a single memory drive. When making any type of transaction, any third party involvement can be eliminated using this bitcoin technology. This will make the transaction easier and faster without any third party approval,
• Low transaction cost involved: –
The transaction costs involved in exchanging this digital currency are very low which makes it more affordable than real currency for the population of the world. Therefore, the cost of any type of transaction is very low which is seen as a convenient feature for the population whenever they make any transaction.
• Fights and alleviates poverty: –
Often the banking system and financial institutions do not provide assistance or support to the backward classes especially in rural areas. Bitcoin serves as an alternative in cases where it extends its powerful financial services to anyone, including those with Internet access. It often serves as a support for the poor and oppressed who are often left with no viable alternative.
When a new or latest technology comes along, there are some negative factors associated with its use which are as follows: –
অভ Lack of knowledge and disbelief of the people: –
Due to lack of knowledge about digital currency, people are more likely to be skeptical about its widespread use. Therefore, there are very few businesses that accept these sources of cryptocurrency, so they limit the number of trading systems that prefer to use virtual currency in their day-to-day transactions.
Transactions that cannot be found: –
Since the transactions made by Bitcoin are not found it provides a place for criminal transactions. In such cases, only drug dealers and prudent individuals use such virtual currencies so that their illicit activities are not easily caught.
ৃতি The nature of instability and uncertainty: –
Cryptocurrencies are often volatile and change frequently. Sometimes people make a lot of money when the market rate of this virtual currency is skyrocketing and sometimes they face huge losses when the price crashes.
Cryptocurrency is an innovative but amateur concept that could potentially disrupt the entire financial market. It is true that this digital currency has caught the eye of the world in a very short time. Every new technology that emerges in the market always has its advantages and disadvantages. To make the best use of it, you need to look at both sides before making a decision.