HISTORY AND ORIGIN
In 1983, The American cryptographer David Chaum created a cryptographic system called eCash. After a period of 12 years, he developed another system, DigiCash that make financial transactions confidential using cryptography.
The Idea or term “cryptocurrency” was coined in the year 1998. The year when Wei Dai, started to think about developing a unique payment method whose primary characteristic was decentralized.
Due to the funding crisis was booming including America and the currencies losing value very fast. Satoshi Nakamoto, created the very first cryptocurrency, Bitcoin. But what was the motive behind it? The reason that drove him to make cryptocurrency is the economic crash that affected millions of people. The need to make people believe that there is a substitute of money, that can be spend and make profit from it.
A few months earlier, crypto community cheering when Elon Musk, founder of Tesla Inc. backing the Bitcoin and twitted that Tesla bought into Bitcoin. As a result, Bitcoin reached all time high price of $58K but just a few months later taking a U turn, he announced that his automobile company not accept the payments in Bitcoin because of environmental concerns that fell Bitcoin to approx. $30K which sent cryptocurrencies into deep dilemma.
Apart from Bitcoin which is certainly the most popular cryptocurrency in the market today, there are many other alternatives to Bitcoin which are thriving for a significant share in the crypto world namely, Ethereum (ETH), Litecoin (LTC), Cardano (ADA), Polkadot (DOT), Bitcoin Cash (BCH), Stellar (XLM), Chainlink, Binance Coin (BNB), Tether (USDT), Monero (XMR).
CRYPTO CURRENCY COUP ON WORLD’S ECONOMY:
Crypto Currency has outlaid a huge mark on the economy of the world since it first arrived on the international stage. Automatically, it brings in more value addition for the digital currency in terms of the transaction security aspects. The preferences in the field of finance has moved incredibly towards Information Technology and knowledge transfer. Unfortunately, world Institutions and Governments showed immaturity on legalities and regularities of cryptocurrency. Therefore, the evolution of regulations of different countries are in different phases.
Why digital currency or cryptocurrency has been able to get hold of a coup on world economy? There are several factors that we come across while finding a reason for this.
One of the reason is identity theft which has been a very common form of theft in the digital banking world. All the transactions are tallied and checked time and again just to make sure that the coins are owned. This is achieved through encryption and smart contracts. This technology makes things highly transparent, i.e. virtually un-hackable and void of frauds. The block chain technology with its security feature being the key has been an integral part of our digital lives. Therefore, the consumer power is more evident in this era of digital currency & cryptocurrency.
Another wonderful reason being instant settlement. Block chain is the highest value addition and a key reason why cryptocurrency is so much wanted in current times. Thus, a dependability graph is shared between the block chain and cryptocurrency.
Yet another most ironic reason why people must prefer cryptocurrency is its accessibility amongst the people. This accessibility is highly linked up with those who have internet access available to them 24/7. Thus, including the rights to make use of the traditional exchange systems. Below are some of the influencing factors;
A DECENT RISE IN ECONOMIC ACTIVITIES:
Globally speaking, there is a decent rise in economic activities that has been witnessed due to the involvement of cryptocurrency. ‘Bitcoin’ is the most famous of these cryptocurrencies has allowed many people to flourish and grow accordingly. However, many still rely on trading as the main source of their income. Hence, while we talk of the global economic coup taking place. Therefore, the economy is gradually shifting for the sake of adaptation to the financial needs.
LOWER TRANSACTION COSTS:
A huge advantage attached that has been a positive part of the economy is lower transaction costs. Hence, the costs associated are minimal. In addition to this, a huge reason is that because the cryptocurrency and the block-chain don’t need a real building that exists. It’s a more virtual world than we can actually imagine. Obviously, as there is no such need of employee wages, utility bills or rent to be paid.
INCREASING THE TRANSACTION TRANSPARENCY TO HUGE NUMBERS:
Transaction transparency comes as big news for the developing countries. Moreover, as it has been for the developed ones in the past. A huge reason also being minimizing or diminishing the risks of potential fraud or corruption. Hence, it dynamically means wonders for the developing economies with equal opportunities. This is through automatic boost to the economy along with their social prospects. Thus, making it an almost universal coup on the world’s economy.
Cryptocurrency is not an illusion, it’s a reality of the new world that is responsible for many latest developments and changes in the world of Finance. However, talking with a different perspective, Bitcoin is considered as a ‘Virtual Currency’ as it only exists as a string of digital information that can be downloaded to a ‘Digital Wallet’. Obviously, one cannot share the Bitcoins with a friend, neither eat out on them multiple times. Furthermore, without the middlemen the transactions are much faster, cheaper and securer. As according to a recent paper released by the Bank of England, a vast majority of money is created by private banks and converted into existence that is in real or physical form. The cryptocurrency or digital currency works in a similar way as the impact is similar to that of a real currency. Therefore, Bitcoins and state-backed currencies both hold smaller differences as both are virtual currencies that run on computer networks. It can’t be regarded as an illusion in any possible way, but can be a litmus test that distinguishes between the real world and the virtual world.