Essential concepts, terms and phenomena from the static part of the UPSC-CSE syllabus.
The word: Cryptocurrency
What is Cryptocurrency?
A cryptocurrency is a form of digital or virtual currency based on a network that is distributed across a large number of computers. It is nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology.
Who issues cryptocurrencies?
Cryptocurrencies are generally not issued by any central authority. Therefore, it makes them theoretically immune to government interference or manipulation.
What are the advantages and disadvantages of cryptocurrencies?
Advantages-They include cheaper and faster money transfers.
— They are decentralized systems that do not collapse at a single point of failure.
— They enable secure online payments without the use of third-party intermediaries.
Disadvantages – They include price volatility
— They include high energy consumption for mining activities
— They can be used in criminal activities.
— It is believed that cryptocurrency will disrupt many industries, including finance and law.
Point to ponder- What are the different types of Cryptocurrencies? What is the legal status of cryptocurrency in India?