Cryptocurrency is a virtual form of currency that uses cryptography for security and operates independently of a central authority, such as a government or bank. It utilises blockchain technology to secure transactions and control the creation of new units. Its appeal lies in its decentralised nature, providing users with greater control over their finances and offering potential for anonymity.
The legal status of cryptocurrency varies from country to country. Some nations embrace it as a legitimate form of payment and investment, while others impose restrictions or outright bans due to concerns about fraud, money laundering, and its potential impact on traditional financial systems.
In India, the stance on cryptocurrency has been somewhat uncertain. While it’s not explicitly illegal, the government has expressed concerns and proposed regulations to monitor and control its use. Despite this, many Indians continue to invest in cryptocurrency, drawn by the promise of high returns and the opportunity to diversify their portfolios.
However, instances like the Gain Bitcoin Ponzi scheme, involving figures like Raj Kundra, businessman and actor Shilpa Shetty’s husband, have affected the reputation of cryptocurrency in India. According to the Enforcement Directorate (ED), Kundra allegedly received 285 Bitcoins from the mastermind of the scam, Amit Bhardwaj, with the intention of setting up a Bitcoin mining farm in Ukraine. Despite the deal not materialising, Kundra is alleged to still be in possession of these Bitcoins, valued at over Rs 150 crore.
As for the future of cryptocurrency, its trajectory remains uncertain. While some envision it becoming an integral part of the global financial system, others caution against its volatility and potential for misuse. The forms of cryptocurrency are diverse, with Bitcoin being the most well-known. Ethereum, Litecoin, Ripple, and Cardano are among the other prominent examples, each with its own unique features and use cases. Companies like Tesla and Square have invested in Bitcoin, while traditional banks are exploring digital asset custody services. This institutional involvement signals a shifting attitude toward cryptocurrency as a legitimate asset class.
Despite the controversies surrounding cryptocurrency, its underlying blockchain technology holds significant promise for various industries beyond finance. Blockchain’s decentralised ledger system has applications in supply chain management, healthcare, voting systems, and more. These potential use cases underscore the growing interest in blockchain technology and its role in reshaping various sectors.
However, in cryptocurrency mining, challenges persist, particularly regarding scalability, energy consumption, and environmental concerns. It requires specialised hardware, such as ASIC (Application-Specific Integrated Circuit) miners for Bitcoin and GPU (Graphics Processing Unit) miners for other cryptocurrencies like Ethereum. These mining rigs consume significant amounts of electricity due to the computational power required to solve the complex mathematical problems.
Whether cryptocurrency becomes a necessary part of our future remains to be seen, its impact on the global economy and society as a whole is undeniable.
At #IBS, #Blockchain is adequately covered in one of the core courses since 2021. #IBS believes in constant innovation and keeping pace with the world’s changing technologies so that our MBA and PGPM graduates are always industry ready.