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What is Cryptocurrency: Nowadays, technology has changed the way people communicate, work, shop and pay for goods. Companies, merchants and customers no longer value cash as much as before and are opting for digital-contactless payments for payments. With the rapid popularity of smartphones, consumers are paying for things on digital platforms. Payments are being made on digital platforms using services like credit cards, debit cards, mobile wallets, netbanking and now a new payment system is emerging – “Cryptocurrenc”. Today we will get complete information about Cryptocurrency.
By now everyone must have heard of Bitcoin. Bitcoin is the most popular cryptocurrency but the popularity of other cryptocurrencies is increasing. There are currently more than 2000 different types of cryptocurrencies and they are evolving more and more every day.
There is a lot of enthusiasm in India for cryptocurrency (Cryptocurrency in India) along with many countries in the world. One of the reasons for this is that despite the risk in cryptocurrency, quick returns and good returns are obtained through investment.
- According to the survey most people have heard of cryptocurrency but do not fully understand what it is.
- 1) What is a cryptocurrency?
- 2) Is cryptocurrency safe?
- 3) How to invest in cryptocurrency?
- We will answer those questions here. So let’s know all the information about cryptocurrency.
What is cryptocurrency?
Cryptocurrency is a digital payment system that does not rely on banks for fund transactions. There is no bank, no ATM for him. It is a system that enables anyone to send and receive payments anywhere. Cryptocurrency is being used for online buying and selling in many countries around the world. Simply put, every country in the world has its own currency. Like India has rupee, US has dollar, Saudi Arabia has real. In the same way, all countries have their own currencies.
Cryptocurrencies cannot be printed like checks, notes or coins. Even then it has value. Cryptocurrency exists as a digital entry into an online database describing specific transactions rather than physical money. These transactions are recorded in a public ledger when you transfer cryptocurrency funds. Cryptocurrencies are stored in a digital wallet.
Uses encryption to verify cryptocurrency transactions. This means that advanced coding involves storing and transmitting cryptocurrency data between a wallet and a public ledger. The purpose of encryption is to provide security and safety.
History of cryptocurrency and when did it start?
Cryptocurrency was launched in 2009. The world’s largest cryptocurrency is Bitcoin and with it came the name Cryptocurrency. Bitcoin was created by Satoshi Nakamoto of Japan. Bitcoin uses the SHA-256 encryption technique. Which is very difficult to hack.
Bitcoin has been one of the best investments anyone has made in the last 10-12 years. If you had bought a bitcoin worth RS 1,000 in 2010, it would have been worth Rs 10 crore in December 2021, just 11 years later.
Is cryptocurrency secure?
Cryptocurrency is usually created using blockchain technology. Describes how blockchain transactions are recorded in “block” and time stamps. It is a complex, technical process that is difficult for hackers to tamper with.
Transactions require a two-factor authentication process. For example, you may be asked to enter a username and password to initiate a transaction. Then, you need to enter a verification code that is sent via text to your personal cell phone. While very complex securities exist for cryptocurrencies, that does not mean that cryptocurrencies are not hacked. It’s just that cryptocurrency is very difficult to hack.
How does cryptocurrency work?
Cryptocurrency uses blockchain technology. A record of each transaction is kept in it. Very powerful computers take care of this which is called cryptocurrency mining. So it is very difficult to hack. Cryptocurrency transactions are very reliable due to blockchain technology and do not require a third party like a bank. Like the stock market, cryptocurrencies are traded on crypto exchanges. The following major exchanges are currently operating in India.
- CoinSwitch Kuber
Why is cryptocurrency so popular?
People see cryptocurrency such as Bitcoin as the currency of the future and are now rushing to buy it before it becomes more valuable. The technology behind cryptocurrency is blockchain. It is very difficult to hack. Cryptocurrency transactions are very reliable due to blockchain technology and do not require a third party like a bank. No one has returned as much as cryptocurrency in the last few years.
Bitcoin has been one of the best investments anyone has made in the last 10-12 years. If you had bought a bitcoin worth RS 1,000 in 2010, it would have been worth Rs 10 crore in December 2021, just 11 years later. This is the reason why cryptocurrency has become so popular.
What is a crypto exchange?
Crypto investors need a platform to trade Bitcoin and other cryptocurrencies and various exchanges provide this service. They help traders keep an eye on the fluctuating market values of Cryptocurrency and engage buyers and sellers to enable cryptocurrency trading.
How does a crypto exchange work?
Almost all exchanges follow the same basic layout. The crypto exchange-platform connects buyers and sellers willing to trade.
- To buy crypto, you have to place an order at the price you want to buy.
- To sell crypto, the seller has to place an order to sell his cohis
- If both you and the seller’s price offering are the same, the exchange connects you with the seller and the transaction is successful.
Names of major cryptocurrencies
There are currently over 2000 different types of cryptocurrencies and they are evolving every day. The names of the major cryptocurrencies are as follows.
Advantages of cryptocurrency
- Cryptocurrency is a digital currency so the chances of fraud are very low so it is almost impossible to hack it.
- The returns in cryptocurrency are very good for investment as they are very good. No bank is required for investment.
- With so many crypto exchanges, crypto mobile applications and cryptocurrency wallets, it is very easy to buy, sell and invest in crypto.
- Money can be exchanged from anywhere in the world. It only takes 15-20 minutes for money from a cryptocurrency wallet to reach a bank account.
Loss of cryptocurrency
- The biggest disadvantage of cryptocurrency is that there are currently no rules for cryptocurrency in any country. Every country is working hard to make rules.
- Cryptocurrency is not controlled by the government of any country so it is a bit risky.
- There is no organization, country, government to control cryptocurrency. So that its price is greatly reduced. So it is risky to invest in it.
- Cryptocurrencies are transacted with secret codes and passwords. If you forget it, the whole amount invested in it sinks. The amount cannot be refunded.
- Cryptocurrency can be used to illegally transfer money from one place to another. This is the reason why crypto is banned in many countries.
What are the laws in India regarding cryptocurrency?
Many people in India have been investing in cryptocurrency for many years. There are currently no rules regarding cryptocurrency. But efforts have begun to regulate it in India. Currently everything is unclear. There were reports that the Indian government had decided to introduce the Cryptocurrency Bill in the Indian Parliament. This Cryptocurrency Bill will work to legally regulate the use of cryptocurrency in India. However, the government has not yet made a public statement on the matter.
- There are many crypto exchanges and crypto mobile applications in India through which you can buy and sell crypto. It is important to know all the rules before buying or selling any crypto.
- Investing in cryptocurrencies in the country was banned and illegal in 2018 after the Reserve Bank of India (RBI) instructed banks. Meanwhile, the case reached the country’s Supreme Court.
- In March 2020, the Supreme Court quashed a circular issued by the Reserve Bank of India (RBI). So the door was opened for investors in India to invest in Cryptocurrency.
- At the time, the Supreme Court had asked the Indian government to legislate on cryptocurrency. It is currently legal to invest in cryptocurrencies in India.
2022 Budget Cryptocurrency News
- In the 2022 budget, Nirmala Sitharaman has covered the following issues.
- Cryptocurrency has to pay 30% tax.
- You will have to pay 1% TDS on transferring the cryptocurrency to a relative or another person.
- Tax will also be levied on the person accepting the cryptocurrency as a gift.
- Apart from this, this tax will also be applicable on NFT.
- NFT is based on blockchain and all its transactions take place in cryptocurrency only.
Cryptocurrency Bill News
Prime Minister Narendra Modi said that emerging technologies like cryptocurrency should be used to strengthen democracy. According to reports, PM Modi will take the final decision on the regulatory framework for cryptocurrency amidst conflicting views. The government has said it plans to introduce a bill on cryptocurrency in the current winter session of parliament after cabinet approval and that income from investing in cryptocurrency is taxable.
Government of India can bring its own digital currency.
The Reserve Bank of India (RBI) and the finance ministry said in a statement that they could bring in India’s own digital currency and even legislate for its purchase and sale. But this is a very complicated process. No official statement has been issued by the government so a wait and watch is required.
This is something to keep in mind before investing in cryptocurrencies
- Complete information should be checked before investing in cryptocurrency.
- Where is the registered address of Crypto Exchange?
- Does crypto exchange come under Indian law or not?
- Who owns the cryptocurrency company? A recognizable and well-known owner is a positive sign.
- It should also look at which investors have invested their money in crypto exchanges.
- The purpose for which the cryptocurrency you are looking to invest in is also very important.
- Do you own a company or just currency or tokens? This difference is important. Owning a stake means that you will share in its earnings (you own it), while buying tokens directly means that you are entitled to use it like chips in a casino.
- Is the currency already developed or does the company want to raise money to develop it? The less risky should be chosen.
How to get started in cryptocurrency?
The first step is to decide which cryptocurrency you want to invest in and how much money you want to invest. Popular alternatives like Bitcoin and Ethereum should be looked at first but also cryptocurrency coins that are lesser known but have the potential to grow in the near future.
To invest in cryptocurrency, you will first need to open an account in India with a crypto exchange service. The KYC process must be completed. You will then need to transfer funds from your bank to the exchange to buy your crypto.
The following things should be kept in mind when you are investing in cryptocurrency for the first time.
- Buy a small amount of cryptocurrency in the beginning Do not invest more than you can afford to lose.
- You do not need to invest thousands of rupees, you can invest as little as a hundred rupees.
- There are currently no rules regarding cryptocurrency. Government rules and news should be kept in mind. If crypto is not currently banned in India, there could be a lot of conflicting information regarding its regulation. Keep reading the appropriate groups, forums and news to stay updated with new information and seek the advice of a knowledgeable person.
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