There was a time when there was no currency in the world. Instead of goods, goods were traded. After that, notes and coins came into existence. And due to this, way of the transaction has changed completely. In today’s era, these notes and coins are called currency. Apart from this, there is a currency that is completely digital. And that currency is called cryptocurrency.
Now the question arises that what exactly is cryptocurrency?
What are some top cryptocurrencies?
Is it legal in India or not? It’s mining? How does it work? How to Invest in Cryptocurrency? A cryptocurrency exchange in India. And what is cryptocurrency’s future in India and in the overall world? All these questions will be answered in this article.
So, let’s start understanding about these topics.
- Generally, the currency is the value of money printed on paper (note) or printed on metal (coins). It is a type of physical currency. But cryptocurrency is totally digital. It is managed by a decentralized system. Every transaction in it is verified by using a digital signature. And cryptography keeps a record of these things.
- Simply we concluded, that cryptocurrency is a virtual currency that is based on blockchain technology and kept protected by cryptography. It is completely virtual. It has no significance physically. It is available in digits only and that too based on a computer algorithm. Earlier it was illegal but by analyzing the popularity of bitcoin, many countries made it’s use legal.
Now the question Arises that if Cryptocurrency is legal in India or not?
- Earlier, the central government wanted to put a ban on cryptocurrency by observing its misuse of it. But the latest news reveals that the center will set up a regulate panel for it soon. This means it is not banned in India.
- Govt. had done an Inter-Ministerial meeting on 02/Nov/2018 to study about virtual currencies. And it resulted in knowing the positive impact of cryptocurrency in India.
- So. It is completely legal in India . Anybody can buy cryptocurrency (like bitcoins)and proceed to trade on it. Cryptocurrency transactions are taxable in India in cases where the person earning such gains is an Indian tax resident or where the crypto is said to be domiciled in India.
Let us know that what is Crypto-currency Mining?
Cryptocurrency mining is the process which includes verification of all the transactions between users. This process of mining is responsible for introducing new coins in the existing ones. This process prevents the involvement of any third party authority in this. Not all cryptocurrencies are mineable . Bitcoin is the example of mineable cryptocurency.
In cryptocurrency mining , miner is responsible for collecting transactions and it organize them in the form of blocks. During the transaction, all nodes of this process receive this information and verify it. Then ,miner gather this information and arrange them in the form of blocks called candidate block.
Initially, each block is hashed individually and these blocks are taken from memory pool. After this hashing process, hashes are organized into Merkle tree or hash tree. In this, all hashes are arranges in pairs and harshed. After arranging them into pars, they are hashed again.
This process continues until the top of the tree is reached. Top of the tree is called root hash or Merkle hash. Then root hash, its previous number and a random number(called nonce) are placed into block’s header. the block hash is generated as a result.
It is considered as valid only when the output is less than target value(blocked hash must start with some number of zeroes). Target value is also called hashing difficulty and it is determined by protocol by ensuring the rate of new blocks to be remain constant and proportional to amount of hashing power of network.
Sometimes , two miners broadcast the valid block at the same time and this results in competition. At that time, miners mine the next block they received This competition continues until the next block is mined. The block that gets abandoned is called orphan/stale block. The miners of this block will switch back to mining the chain of the winner block.
Let’s Discuss about working of Crypto-currency
We know that cryptocurrency works on the basis of decentralized network, therefore there is no need of bank or name for the transactions and to secure and store money. Actually, the cryptocurrency works through the medium of blockchain. It keeps the record of all the transaction. And they are protected by powerful computers, which is known as cryptocurrency mining. And miners are responsible for this mining.
During any transaction in cryptocurrency, there records are kept in blockchain. Means it is kept in one block. Security and encryption of this block is also done by miners. For this they have to solve cryptographic puzzle and then they find hash code for a particular block.
When a miner finds correct hash code, then block gets protected. And then it is added to blockchain. Then they are verified by other nodes present in a network. This process is called consensus. In this process, when block’s security is made sure, and that is found to be correct then the miner which has secured it got the crypto coins. It is actually a reward which is called proof of work.
What are the Top 10 Crypto-currency Where you can invest?
We know cryptocurrency is becoming a topic where people are finding interest. Even the big and popular companies are putting cryptocurrencies in their long term plans like Apple, Facebook, PayPal, Tesla and many more. This given table shows you the top 10 cryptocurrencies of the year 2021. They are given on the basis of market capitalization. The following list shows top 10 cryptocurrencies with their symbol and price.
Bitcoin (BT) is a cryptocurrency which was created in 2008 by a group of people or individual named Santoshi Nakamoto. Without the use of intermediaries, people can make transactions on peer to peer bitcoin network. If its price rises or falls, there is no denying that bitcoin will continue to dominate the cryptocurrency sector. It is a most popular cryptocurrency with a market capitalization of $1.01 trillion.
After Bitcoin, it is the second-largest cryptocurrency on the basis of market capitalization. It was created in 2013 by Vitalik Buterin(programmer). This cryptocurrency was initialized by using 72 million coins and went live on 30 july 2015.Its coin market capitalization is at 195.54 billion in march 2021.
Tether was created in 2014.It was first currency to be pegged as the US dollar. Earlier it was called real coin. It is a stable coin, which keeps cryptocurrency’s price stable. It was the third-largest cryptocurrency on the basis of market capitalization. It has a $ 24.4 billion market capitalization having $1.00 per token value.
Cardano is created in 2017 by Charles Hoskinson but it released in 2017. Cardano is an open-source project which creates a public blockchain platform for smart contacts. The internal cryptocurrency of Cardano is ADA. It has released products for identification of management and product traceability. It uses Ouroboros, they are the proof of stake algorithm which creates blocks and validates transactions.
For transferring of messages, it allows diverse blockchains. During pooling their security, they share their unique features. In simple words, we can say, Polkadot is a scalable heterogeneous multi-chain technology. It is called heterogeneous as it flexible and non –assumption maker about the nature and structure of chains in a network. In today’s era, it’s the price is $22.58.
Ripple cryptocurrency is created in 2012 but it starts in 2013 by Jed McCaleb. They create XRP which is a payment token and used in a decentralized payment system. It allows fast transactions and cheap transactions as it is an open-source protocol. Ripple is a currency as well as a platform. This platform has its own currency i.e XRP.
The company which has made this cryptocurrency is also named as uni swap. It is uniswap exchange protocol that operates on a decentralized basis. Automatic transactions are possible in this cryptocurrency. It runs on the Ethereum blockchain. Liquidity is the main problem in this cryptocurrency. During, low liquidity, traders cannot trade here.
Litecoin in created in 2011.It is peer to peer cryptocurrency. It is based on open source cryptographical platform.It uses scrypt in ots proof of algorithm instead of SHA 256. It’s transaction speed is 4 times as compared to bitcoin.
Chainlink was created in 2017 by Sergey Nazarov. Chainlink collects data from on-chain and real-world sources. It is an oracle network that is tokenized. It does not have its own blockchain but it can run multiple blockchains simultaneously. It powers the chainlink decentralized oracle network.
Bitcoin cash was created in 2017 as a fork of bitcoin. There was a need for a larger block in bitcoin and this drawback is completed with the help of bitcoin cash. It can keep more transactions in a single block. But bitcoin and bitcoin cash have the same census. This means they have some technical similarities.
Discuss About Cryptocurrency exchange in india
Indias are participating in using cryptocurrency. We have observed many exchanges of cryptocurrency in which people have shown interest. People use to buy, sell and trade cryptocurrencies. Some popular exchanges of cryptocurrencies in India are listed below:
It was founded in 2017. It was acquired by Binance Holdings later on and it is world’s largest cryptocurrency exchange (on basis on trading volume).It is available on Mac, Os , windows etc.
Crypto investors found this exchange interesting. It is Mumbai based. It has about 1 lakh users who use it actively and practice about 200 crytocurrency exchange.
It is most clean and user-friendly interface. It is as fast as lightning in field of transactions. It offers trade across six EUR pairs of crypto and 5 crypto-crupto pairs.
- CoinSwitch Kuber
This exchange will let us to trade starting with just rupees 100.It has over 3 million users.It was found in 2017 but it came into market in 2020.
It was launched in 2013. It is first cryptocurrency exchange in india.It has over 1.2 million users.It gives us facilities or recharge, top up wallets and use bitcoins to recharge mobile phone and Dish TV.
Now you must be curious that how to invest in cryptocurrency?
While opening an account , we need to follow know your customer process (KYC).Video KYC is not compulsory. It needs permanent account number and our proof of identity (aadhar /passport).This process can give facility instantly or it may take time of a week .
We need to transfer money to wallet if we need to buy a coin (crypto-coin).We can use internet banking facility for it. After you enter the reference number , your wallet gets credited. We can use same process to transfer money to bank. We can select payment gateways for the completion of transaction.
Now the Question arises, what is the future of cryptocurrency in INDIA?
We have observed some debates of media and experts based on this cryptocurrency which are believable. Nandan Nilekani (Infosys non-executive chairman) , he was in the favour of acceptance of cryptocurrency in India. Recently, government(crypto center) made it compulsory for companies to reveal their investments in cryptocurrencies. Slowly , India is moving towards cryptocurrency. This topic is in great discussion on parliament also. Therefore , cryptocurrency can have a good future in India.
FUTURE OF CRYPTOCURRENCY:
Cryptocurrency is on the way of reaching heights, especially bitcoin. As it is heard that almost 94% of bitcoins will be released by the year of 2024. Snapchat’s investor estimated that Bitcoin will hit to stagger $500000 by 2030. As this cryptocurrency is safe and volatile, it is expected to grow exponentially. As we know, a large number of technical companies want to move towards using encrypted currencies, so this shows the success path to cryptocurrency.