A Cryptocurrency can be explained as a digital asset that have been designed in such a way that it can be used for the purpose of exchange as a digital format of money or currency. The Cryptocurrency uses the technique of the cryptography for the purpose of securing the assets, transactions and other details of the customer. In the past years it have been seen that the use of the Cryptocurrency like the Bit coin have increased a lot and people are preferring these over bank money as there is more profit to invest in the Cryptocurrency. Although many of the countries in the world does not prefer digital assets like the Cryptocurrency to be legal, but in some of the countries like the America the demand of these have been increasing since the last few years (Narayanan et al., 2016). Due to the ongoing demand of the cryptocurrency it can be often seen that big business mans are trusting to invest in cryptocurrency other than the American Dollar. This paper focus on the technology of the cryptocurrency, benefits, faults and how it is changing the American dollar market.
The technology of the cryptocurrency are very much simple to understand, it uses the concept of the cryptography for the purpose of securing the data of the customer. Other than this cryptocurrency use the technology of the blockchain and time stamping. The concept of cryptography uses the technique of encryption for security purpose. All the transactions and every process that is done in the world of the cryptocurrency is encrypted and hence one of the most secured way. Other than this, the technology of the blockchain can be explained as a shred ledger way of transaction (Hayes, 2017). Blockchain is a continuous block or record that uses the technique of the cryptography. Each of the block in the blockchain contains a hash pointer and a time stamp that is whenever ever the transaction is done the value of the hash and the timestamp is recorded. Thus whenever any further transaction is done, tit cannot be done without tampering these values. To be more specific let us suppose there are 3 users of the technology. When client 1 and client 2 does a transaction the record is saved, again when 2 and 3 does any transaction it cannot be done without informing client 1. That no transaction can be done without informing the previous owner of the fund. Also some of the major features of the cryptocurrency are is that there is no need of a central authority to monitor the transactions (Scott, 2016). The ownership of the cryptocurrency is solely depended on the value of the cryptography. When a new cryptocurrency is created it is known as the origin and the owner comes to know all the further transactions of the same. One of the major advantage and feature of the cryptocurrency is anonymity of the currency. That’s is it can be called as pseudonymous, as the wallets of the cryptocurrency are tied to hash addresses and not persons. Hence it becomes tough for anyone to know the actual owner, as it is not traceable and only the transactions are publicly available.
Cryptocurrency is not a legal status in all the countries of the world. Some of the countries are still barring it from use siting different issues. While the USA permits the use of the cryptocurrency, it has been facing some of the major issues with dollar. It has been seen that many of the people are investing more in the cryptocurrency and the value of the dollar is decreasing. This is because of the factor that there is more profit and more return in saving money with cryptocurrency (Nguyen, 2016, November). The USA government also stated that the cryptocurrency like the bit coin can be used for the purpose of buying and selling of items although there would be churched for tax for the transactions done. Other than this many of the countries like the Russia describes that owning of cryptocurrency is legal in the country but the use of the same for the purpose of transactions are not accepted. While some of the countries like the china totally bans the owning of the cryptocurrency.
These issue of the legalization has come up due to the decentralised nature of the cryptocurrency. That is it becomes tough for the legal agencies to trace the transactions done in cryptocurrency and hence the legalisation issue is rising for the countries. Also if there is any fraud or theft in the cryptocurrency then there is very less or no scope for turning the back the money used (DeVries, 2016). The dark market net is also one of the major reason for the organisation to regulate it.
This is one of the greatest controversies that the world are facing in the modern times. With the rise of the cryptocurrency is the recent future, many of the investment bankers are looking for the potentials on how the cryptocurrency like the bit coin, ethirum can replace the traditional flat currencies (Narayanan, et al., 2016). While the countries like the Cuba have already been started believing in the potential of the cryptocurrency other than the currency that are normally used (Inan, 2018). With many of the researches of the fiancé industry of the United States of America stated that the term replacing of dollar over the cryptocurrency would not happen, but there are chances that most of the transactions of high values can take place using the cryptocurrency and this will reduce the use of dollar.
There are many advantages of using the cryptocurrency in the daily life, some of the main points of the advantages are:
While there are some of the major advantages in the use of the cryptocurrency but also there are some of the major disadvantages of using the same.
Conclusion
Thus, concluding the topic it can be said that the cryptocurrency is one of the most promising technology that the world is having today. Its potential of dissolving flat cash like the Dollar is still a question to the world, but can never be said. IT may happen that at certain time it exceeds the dollar, or vice versa may also happen and the value of the cryptocurrency gets down to zero. It is a question of uncertainty on whether there the cryptocurrency will rise or dissolve in the recent future.
References
Chohan, U. W. (2017). Assessing the Differences in Bitcoin & Other Cryptocurrency Legality across National Jurisdictions.
Choo, K. K. R. (2015). Cryptocurrency and virtual currency: corruption and money laundering/terrorism financing risks?. In Handbook of Digital Currency (pp. 283-307).
D’Alfonso, A., Langer, P., & Vandelis, Z. (2016). The Future of Cryptocurrency. Ryerson University, 25.
DeVries, P. D. (2016). An Analysis of Cryptocurrency, Bitcoin, and the Future. International Journal of Business Management and Commerce.
Hayes, A. S. (2017). Cryptocurrency value formation: An empirical study leading to a cost of production model for valuing bitcoin. Telematics and Informatics, 34(7), 1308-1321.
Hileman, G., & Rauchs, M. (2017). 2017 Global Cryptocurrency Benchmarking Study.
Inan, S. (2018). Are Cryptocurrency Price Changes Predictable (Doctoral dissertation, Northeastern University).
McIlhenny, M(2016). Cryptocurrency and Economic Sovereignty. Appropriate Technology for the 21 st Century: Technological Innovation to Empower Africa, 75.
Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press.
Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and cryptocurrency technologies: a comprehensive introduction. Princeton University Press.
Nguyen, Q. K. (2016, November). Blockchain-a financial technology for future sustainable development. In Green Technology and Sustainable Development (GTSD), International Conference on (pp. 51-54). IEEE.
Scott, B. (2016). How can cryptocurrency and blockchain technology play a role in building social and solidarity finance?(No. 2016-1). UNRISD Working Paper.
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