Cryptocurrency! What is it? This is the first question which strikes our mind, when we hear about the word ” cryptocurrency”. So, Cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It controls the formation of new elements of distinct cryptocurrency and also protects and verify transactions by using the concept of cryptography. The first decentralized cryptocurrency was Bitcoin . It was produced in 2009 by pseudonymous developer , Santoshi Nakamoto. The word “Cryptocurrency” itself has a more clearer meaning when cleaved. Crypto means using Digital Encryption and currency is a system of money.
Functioning of Cryptocurrency will be better understood, if one becomes more familiar with the following concepts-
3. Distributed Systems
4. Open Source Code
6. Public Ledgers/ Blockchain
Indian Finance Minister, commented on the topic of Cryptocurrency status of India in the first week of February, ” Cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto assts in financing illegitimate activities or as part of the payment system” , said Jaitely. For the naives, cryptocurrency is a digital currency which uses encryption techniques to synchronize the production of units of currency. Following the paths of countries like China and South Korea, cryptocurrencies along with the Bitcoins , have been prohibited in India, ultimately casting a devastating effect over the admirers. Exchanges which were dealing over cryptocurrencies were terminated several months ago.
Whereas, Monish Panda, founder of law firm- “Monish Panda And Associates” said,” Government will now either come out with a legislative mechanism or make a suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and will penalise entities and individuals who are involved in trading and circulation of cryptocurrency.”
Several bank deals were suspended due to this decision. There had been several warnings issued by the Indian Government and RBI before,against dealing in Cryptocurrencies including Bitcoins. Nevertheless, the government has identified Blockchain and said ,” Distributed ledger system or the Blockchain technology allows organisation of any chain of records or transactions, without the need of intermediaries. The Government will explore use of Blockchain Technology proactively for ushering in digital economy.
Therefore, The Government is tenacious on its opinion. “In regards to cryptocurrencies, they don’t consider it as a legal tender, which the finance ministry had mentioned in December. It further says that corporates are not allowed to use it as a payment system and can’t use it for illegal activities. This indicates that if there is money laundering by individuals or corporates , you can expect a crackdown “, said Praveen Kumar, chairman and chief executive officer of Belfrics Global SDH, a company that runs Bitcoin exchanges in Singapore, Malaysia, Bahrain, Japan, Kenya, Nigeria, Tanzania and India. Bitcoin exchanges are disappointed with this want and watch strategy.
However, Government is careful towards it’s approach on Cryptocurrencies , it is optimistic on the utility of Blockchain. Cryptocurrency busines feels that Blockchain and Cryptocurrencies have to proceed conjointly. ” Unless it is a decentralized system, it is just another form of keeping track. If you want to apply Blockchain in supply chain or manufacturing industry, you are basically putting data in the system for everyone to view. It is then just a centralized system that means someone has an authority to modify it .”, said Jincy Samuel, chief operating officer , Coinsecure. The administration elucidated that cryptocurrencies are not legal tender, which clearly implies, that they are not a currency. Hence , it is a paradox, and doesn’t mean that acquiring cryptocurrencies such as Bitcoin is illegal or banned.
Currently, The Government has not labelled it illegal. Striding with mindfulness, is therefore , the duty of a Cryptocurrency user as there are many fluctuations recorded in the Bitcoin price. The price of Bitcoin have been fickling exceedingly in the last few months. Concludingly we can say that , the legal status of Bitcoin is uncertain. So, if you are looking for some pretty investment with a sure shot profit you will have to perform continous research by yourself.