Crypto currency is a digital currency which is designed to use as a medium of exchange. It uses cryptography to prevent and verify all transactions as well as it controls all the formation of new units of a particular crypto currency. This is a currency which has limited entries in a database that is why no one can change the currency without any specific condition. The history is attached besides the formation of crypto currency. There were many attempts attempt by researchers to formulate a digital currency at the time of 90s technology with the different system such as Flooz, Digicash and Beenz. Fraud, financial problems, conflicts between the employees and managers were the reasons of failure in many attempts (Prusty, 2017). In 2009, this currency was founded and it has been seen that an anonymous programmer or a group of programmers with the name of Satoshi Nakamoto introduced the currency. This currency was introduced with the name of Bitcoin and Satoshi described that this coin is peer to peer electronic cash system. This is system done by the blockchain which is a public ledger of all the transactions and it is available to everyone. Each and every person in the network is able to see every account balance (Chang, & Svetinovic, 2016). Bloch chain contains the every transaction that involves the senders and recipients public keys and the sum of coins transferred. It is observed that the transaction is spread in the network but it need to confirmed first.
In a crypto currency network, transactions can confirm by miners by solving a cryptographic puzzle. After confirming the transaction, the transactions become irreversible and a miner receives rewards with transaction fee. This currency is based on all the participants regarding the balances and transactions. If the network is not supporting on a single balance then the system can easily break. To prevent these issues there are many lot of rules are pre-built. These preventions build the blind trust of the third parties on this concept (Zalan, 2018).
This concept is different because this concept is completely decentralized; there is no central controlling authority or no servers involved. It can be said that this concept is closely resembles with the peer-to-peer file sharing networks. Researchers face many problems at the time of formulation of currency but payment network is one of the most problems which can be solving by using double-spending. It is a fake method of spending the same amount twice. The solution of this problem is a trusted third party which has a central control and kept the records of balances and transactions of bit coin (Blakstad& Allen, 2018). This method always required an authority to control the funds and personal details of a person.
People believe that crypto currency is the hottest investment opportunity which is currently available. Many of people becoming millionaires because of their bitcoin investment and it is the most recognisable digital currency to date. The price of bitcoin is continuously rising; it is observed that bitcoin was valued $800 but in 2017 the price of bitcoin is exceeded$7000. Crypto currency attracts more interest which becomes harder and the amount of coins received as a reward decreases (Nowi?ski, & Kozma, 2017).
Most crypto currencies are constructed from the efforts of miners with the security and privacy in mind. It can be said that the users can expect transactions to be private and secure. It is an important advantage for the minors because there are many hackers which can easily hack the transactions and use for themselves. Formulation of one crypto currency takes many efforts and time so that security and privacy is a major factor for minors.
Crypto currency is legal but if it is claimed for tax purpose in a correct manner then it is mentioned as legal currency. It is useful currency and limited which is beneficial for the economy. The currency opens many opportunity for transactions that develop the economy (Kaminskaya, & Petrova, 2018). Legality is an advantage for the minor because if it is claimed as legal currency than they can easily and openly use this for big transactions.
It is observed that the crypto currency has low transactions cost as compared to the other payment methods such as PayPal. This currency is formulated by solving the mathematical problem which is solved with the efforts of a miner. In the other currency, mining process if used but in this method the only thing which is used is an effort of a researcher. Thus, it can be said that crypto currency has less cost.
Anyone can formulate the currency with the help of computer and the internet which can make money mining coins but in the other case the process of mining is different which takes times as well hard work which is not access by any one.
It is decentralised currency which can be deflated or inflated just because of choices of a central government.
The transaction of crypto currency is quick, permanents and less risky to fake; these are the advantages of crypto currency. It has been seen that there are many hackers which can use the advance technology for illegal work. But in the case of crypto currency, currency is creating with the security and privacy (Antonopoulos, 2014). It is also a quick transaction method thus, the miner can easily use without wasting any time.
The transaction of miners are secure and private; it is secure from public that no one can see the transactions but it is not secure from the third parties those are involved in crypto currency. Third parties are able to see the wallets and exchange transactions because miner does not secure the data always.
The value of crypto currency is change with laws and scarcity of its resources thus it is difficult for the government to claim tax on this currency. This currency is limited but it is not clear that how much value the coins have that create confusion which makes difficult for the government to decide to charge tax value on them. It is a disadvantage for the miners as well as for government and economy (Sayed, & Abbas, 2018).
Most of people did not accept the crypto currency; there are certain vendors that accept this currency just because of changing the prices.
It is a major disadvantage for miners because there is no way to recover the coins. It has been seen that if a coin is lost then there is no way to protect the value of a coin in the account of miner. In this case, miner suffers from loss which is raise due to loss of coin.
It is observed that crypto currency has lack of flexibility of centralised currency just because of its non-inflationary nature. It has been seen that it is still an emerging technology which value is not decided because of its fluctuating prices.
The privacy of crypto currency can be used for legal and for illegal purposes. It has been seen that Bitcoins opens the door for criminal to take part in these activities like money laundering, terrorist funding and the exchange of illegal good and services. This currency supports the many criminals in criminal’s activity (Shafi, Patel, Collins, & Haidermota, 2018).
Crypto currency is an application of block chain which is introduced by UAE Crypto currency strategy in 2011 by Sheikh Mohammed bin Rashid (Shehhi, Oudah, & Aung, 2014). The main aim of introducing this technology is to attract the 50% share of government transactions by using this technology (Cayettl, 2018). This technology is first transaction is globally introduced by Satoshi Nakamoto (whch is a fake name given by a group of people). Financial Services regulatory authority is the first regulator of this concept in UAE which regulate and managing the whole activities and issues relating to crypto currency.
In European Union the firm main focuses on data privacy which is the first regulation of the crypto currency and the firm implementing this regulation by recording the transactions with the application of block chain. There are many firms which are denies to implement the rules and decentralised the crypto currency technology to providing the advantage to the users. It has been seen that in East Asain nations, the firms gives the importance to business regulation later on this concept (Glotov, & Mihailov, 2018). That is why the companies are allowed to operate the crypto currency technology without any restriction. Japan is a country which adopted bitcoin but they are not preparing to hold the business powered by crypto currency. In South Korea, the community of crypto currency is increases with the current years which states that this currency is adopted by many companies of South Korea but this concept is restricted in US.
Crypto currency is a technology which is used as money which is important for the monetary transactions. Bloch chain is an application which records all transactions and allows the representatives to operate the business. Crypto currency helps the nation to reduce the humanitarian calamities which is caused by transactions. This technology builds the trust between among the people especially in miners (Loukil, ET AL., 2017). According to world economy, 10% of GDP will stored in block chain and it can be said that taxes will charge by using the block chain application in the near future. IBM companies invested $200 million in crypto currency technology to earn the high interest in the near future or increasing the value of currency (Park, & Park, 2017).
Crypto currency has high level of risk and the main risk is failure of functioning and control.
It has been seen that crypto currency has number of problem related to jurisdiction just because crypto currency cross jurisdictional boundaries (Patel, & Mistry, 2018).
Data privacy
It is observed that data is stored but it has huge risk because this data is enough to expose the personal details of someone.
Conclusion
From the above analysis, it has been concluded that Crypto currency is introduced as a medium of exchange. Crypto Currency is an illegal in many places just because the government confuse to claim the taxes. It was introduced by Satoshi Natamoko in 2009. There are many advantages of using the crypto currency such as low cost, process, legal and many others. But it also has many disadvantages which affect the revenue of economy such as data security, taxes, acceptance in many countries and many others. It has been seen that Crypto currency technology is increases in South Korea but restricted in US. It also has huge risk to adopt this currency such as frauds, data security and many others. UAE adopted the strategy of crypto currency with the main focuses on holding 50 % of government share. There are also legal issues which are related to crypto currency because it cross the limits of jurisdiction and it contains the enough data to spread the personal detail of a person. Crypto Currency technology will develop in near future due to its quick transactions.
References
Antonopoulos, A. M. (2014). Mastering Bitcoin: unlocking digital cryptocurrencies. ” O’Reilly Media, Inc.”.
Blakstad, S., & Allen, R. (2018). Central Bank Digital Currencies and Cryptocurrencies. In FinTech Revolution (pp. 87-112). Palgrave Macmillan, Cham.
Cayettl, D. A.Z. (2018). What you need to know about cryptocurrencies in UAE. Retrieved from: https://www.khaleejtimes.com/business//banking-finance/what-you-need-to-know-about-cryptocurrencies-in-the-uae
Chang, T. H., & Svetinovic, D. (2016, November). Data analysis of digital currency networks: Namecoin case study. In Engineering of Complex Computer Systems (ICECCS), 2016 21st International Conference on (pp. 122-125). IEEE.
Glotov, V. I., & Mihailov, D. M. (2018). What are the Technical Means the State Prepare for the Regulation of the Cryptocurrencies?. KnE Social Sciences, 3(2), 583-592.
Kaminskaya, T. E., & Petrova, V. A. (2018). Cryptocurrency: Financial Revolution or a Threat to the Financial System. KnE Social Sciences, 3(2), 111-117.
Loukil, F., Ghedira-Guegan, C., Benharkat, A. N., Boukadi, K., & Maamar, Z. (2017). Privacy-Aware in the IoT Applications: A Systematic Literature Review. In OTM Confederated International Conferences” On the Move to Meaningful Internet Systems” (pp. 552-569). Springer, Cham.
Nowi?ski, W., & Kozma, M. (2017). How Can Blockchain Technology Disrupt the Existing Business Models?. Entrepreneurial Business and Economics Review, 5(3), 173-188.
Park, J. H., & Park, J. H. (2017). Blockchain security in cloud computing: Use cases, challenges, and solutions. Symmetry, 9(8), 164.
Patel, D., & Mistry, V. (2018). Border Control and Immigration on Blockchain. In International Conference on Blockchain (pp. 166-179). Springer, Cham.
Prusty, N. (2017). Building Blockchain Projects. Packt Publishing Ltd.
Sayed, M. N., & Abbas, N. A. (2018). Impact of crypto-currency on emerging market focus on gulf countries. Life Science Journal, 15(1).
Shafi, A. Patel, K. Collins, A. & Haidermota, (2018). Cryptocurrency laws and regulations in UAE. Retrieved from: https://www.vantageasia.com/cryptocurrency-law-uae/
Shehhi, A., Oudah, M., & Aung, Z. (2014,). Investigating factors behind choosing a cryptocurrency. In Industrial Engineering and Engineering Management (IEEM), 2014 IEEE International Conference on (pp. 1443-1447). IEEE.
Zalan, T. (2018). Born global on blockchain. Review of International Business and Strategy, 28(1), 19-34.
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