Cryptocurrency, is a set of binary data that serves as a means of exchange. Transactions are done online only in the secure process of cryptography. It is an Internet-based currency that differs from fiat money (e.g. bank notes, coins) and has no physical existence. One of its major advantages is instant transaction and borderless transfer of ownership in quick time. It has become a fast growing market since 2017.
The Enigmatic Creator of Bitcoin
Satoshi Nakamoto designed and developed the blockchain system and Bitcoin, the first cryptocurrency for it. Because the identity of Satoshi Nakamoto is still unknown.
It can be a codename of a person, group, organization or company. In 2009, an individual or group under the pseudonym Satoshi Nakamoto introduced a currency system called peer-to-peer currency. Many say Satoshi Nakamato is not a person, it is a team. That team may be a team within Google, or America’s NSA (National Security Agency) may have created such a research team and done this secretly. So they stayed behind the scenes. There are so many media, computer geeks and hackers all over the world; it is a deadly surprise to hide from all of them.
Cryptocurrency and Blockchain
This state-of-the-art digital process of transferring money without the help of a third party or bank is done using the cryptocurrency blockchain. It ensures any money transaction through more transparency and accountability than the bank. The system is instant and without any possibility of looting or loss. The name of this technology is blockchain, which is currently seen by the world’s biggest technologists as the banking technology of the future. Some banks in some influential countries are already investing billions of dollars behind this technology. Bitcoin was created in 2009 as the first decentralized cryptocurrency.
Blockchain Technology
Block chain is a means of customer-to-customer transactions using cryptocurrencies, maintaining privacy and security without the help of third parties. This block chain technology is a direct exchange medium without any third party (third party) using internet technology. Here the third party means the mediums that help and allow the existing transactions. For example, if you send money from Dhaka to a friend in Chittagong, you take the help of a bank, which is basically a third party or a government permission to send money out of the country legally, without which you cannot bring currency. And this is where block chain technology will help you transact easily without the help of third parties. Digital money works here as cryptocurrency which has no physical presence.
Block chain technology is a technology and platform similar to or more likely than the web and the internet! With this, transactions related to real life and online can be settled seamlessly. A block is created with all the encrypted information of the transaction of all the money or assets being traded all over the world in a certain period of time. A completely immutable distributed and decentralized ledger sequenced with those blocks is basically called blockchain.
Ledger books are used to record all transactions of economic activities. The software keeps these records in the database. Blockchain is such a ledger, where there are many such blocks side by side. Each block contains all the data of all the transactions that took place around the world at one point in time. The private key is required to read this encrypted data. That is, if you have transacted here, all the information can be read using your assigned private key, no one else can. People will notice the transaction volume. But whose money went to whom is not known; Because money will go only through identity address. There will be no identity.
Each block in the blockchain is completely immutable. Once a block is added to the chain, it is impossible to change it. The blocks are arranged in the order in which they were made. Each block knows which block is before it. Thus one block is connected to another. Blockchain is a distributed and decentralized system, i.e. all users of the same blockchain around the world or specific users have a carbon copy. So even if one or hundreds of servers or computers go down together, nothing will happen to the blockchain.
Advantages of Blockchain Technology
Security
Blockchain technology is very secure technique as every transaction is encrypted by cryptography technique. And the connection between each block is established using hashing technology.
Privacy
Also, the user’s identity is hidden in the blockchain system.
Prevention of Theft and Corruption
Since the information is constantly updated, it is absolutely impossible for information to be stolen or corrupted.
Transparency
When data is recorded in a block, transactions on the blockchain are verified once before. Data cannot be deleted in this system, thereby maintaining data transparency.
Freedom from third party hassles
Blockchain technology requires no third parties. As a result, anyone can easily transact from anywhere in the world without any hassle. Which is very troublesome in the current banking system.
Validity of Cryptocurrency Bitcoin
Most countries have not clearly defined the legality of Bitcoin, preferring to take a wait-and-see approach. Some countries have implicitly consented to the legitimate use of Bitcoin by overseeing certain regulators. However, as of June 2021, El Salvador is the only country that recognizes Bitcoin as legal tender.
United States
The United States has taken a generally positive stance toward bitcoin, although several government agencies work to prevent or reduce the use of bitcoin for illicit transactions. Famous businesses like Dish Network (DISH), Microsoft, Subway, and Overstock (OSTK) welcome payments in Bitcoin.
Canada
Canada maintains a generally bitcoin-friendly stance and ensures that the cryptocurrency is not used for money laundering. Bitcoin is considered a commodity by the Canada Revenue Agency (CRA).
Australia
Like Canada, Australia does not consider Bitcoin to be money or foreign exchange, with the Australian Taxation Office (ATO) ruling it as an asset for capital gain purposes.
Europe
On October 22, 2015, the European Court of Justice (ECJ) ruled that buying and selling digital currencies is considered a supply of services and is VAT-free in all member countries of the European Union (EU).In Finland, the Central Board of Taxes (CBT) classifies Bitcoin as a financial service and gives it VAT exempt status. Belgium’s federal public service finance has also exempted Bitcoin from VAT. Bitcoin is not regulated in Cyprus. The UK’s Financial Conduct Authority (FCA) has taken a pro-Bitcoin stance and wants the regulatory environment to be supportive of the digital currency. Bitcoin is subject to certain tax rules in the UK. Bulgaria’s National Revenue Agency (NRA) has brought Bitcoin under its existing tax laws. Germany is open to bitcoin, where it is considered legal but taxed differently depending on whether authorities are dealing with exchanges, miners, enterprises or users.
Skyrocketing Bitcoin Price
Starting from the year 2009, on October 20, 2021, the price of each bitcoin exceeded 65 thousand dollars. Which is the highest in history among all types of cryptocurrencies. ETF is a type of mutual fund that can be traded on stock exchanges. But last month the price was not so much. At the end of September, the price of Bitcoin was around $43,000. Later on, it reached 46,767.91 US dollars on January 5, 2022 through ups and downs. More Bitcoin-based ETFs are waiting to hit the US stock market. If the country’s Securities and Exchange Commission approves after the review, they will start trading.
Cryptocurrencies: a risk or a World of Opportunities?
The privacy practices of cryptocurrencies are enviable. The privacy of the name of the owner of the cryptocurrency, like a one-time Swiss bank customer, is strictly protected. And wherever there is secrecy, tax accounting is difficult. Its transaction is almost impossible to know. These coins are kept in digital lockers. Coins will be lost forever if someone forgets the password. This is one of the reasons why the price of coins increases over time. The number of these coins is limited. As of 2021, the value of which is more than 28 billion dollars. Cryptocurrency prices have also been seen to fluctuate by as much as 20 percent per day. This price fluctuation is the main attraction of cryptocurrencies for many.
Cryptocurrencies are very attractive to some people today. Anyone can use cryptocurrencies much like regular currencies while remaining anonymous. Cryptocurrency is ‘transferred’ from one person to another person’s wallet without a bank or financial institution in the middle. As a result, the person himself is the sole shareholder of the investment or transaction. For the same reason, when in danger, you have to take care of yourself. More precisely, there is almost no chance that any consumer protection agency or government agency will have the responsibility to deal with an unknown hazard.
The United States is the beginning, while China is the end
China was the world’s biggest ‘player’ in Bitcoin mining. However, according to the Cambridge Center for Alternative Finance in the United Kingdom, the United States has taken over that place. China has lost its top position due to the banning of transactions in all types of virtual currencies. According to a Reuters report, China’s Cabinet Department took the initiative to ban all cryptocurrency transactions and mining (creation of new virtual currency) including Bitcoin at the end of May. After that this sector was kind of destroyed. People associated with mining stopped operations, some even started migrating abroad.
The Future of Virtual Currency in the US
The billion dollar question is why China moved away from this currency shrouded in a cloak of extreme secrecy and security. Perhaps the Chinese administration has backed away from the prospect of technology-based speculation by prematurely sponsoring it. But the US has made a big bet here. The United States is desperate to once again assert its dominance over the world by developing a technology-based eight currency system. America knows that the old world order can only be recovered by riding on the shoulders of technology through the protection of individual rights.
Virtual currency is the future
There is no alternative to digital currency for the global online market and virtual world. Safe and secure instant shopping and currency transfer is possible only in cryptocurrencies. The ability to protect the privacy of individual identities and conduct transactions with transparency is not possible in any other way. The strong attraction of people towards this currency and the increased security capabilities in the virtual world have already established it as the most reliable medium of exchange. Most of the countries in the world have observed it.
A large part of the world people have integrated the virtual world with their entertainment and daily needs. Now games mean virtual reality. Now the novelty is the handiwork of the virtual world. Virtual reality has taken over the psyche of modern people. Therefore, virtual currency – cryptocurrency is going to be its worthy partner. Governments of various countries are forced to accept this issue. Salvador may have been the first acceding country; But technologically advanced countries are the main sponsors of this currency.
Paper currency was first introduced in China during the Tang Dynasty in the 7th century, but gradually spread throughout the world in the 19th century. In just over two and a half centuries, it has come face to face with virtual currency. The new currency system launched in 2009 challenged paper currency within just an era. Some scholars believe that paper money will continue its dominance in this age of technology for perhaps two more years.
Bitcoin security and future
In addition, a threat to Bitcoin in the age of malware is botnet infection, which generates Bitcoin by mining unbeknownst to miners and transfers funds to the botnet owner.
The Future of Bitcoin
Marc Andreessen, co-founder of Silicon Valley-based venture capital firm Andreessen Horowitz, outlined the future of Bitcoin in a sub-editorial titled “Why Bitcoin Matters” published in the New York Times on January 21, 2014.
Note that Andreessen Horowitz invested $50 million in Bitcoin-related start-ups in January and is currently exploring more Bitcoin-based investment opportunities.
An inevitable and huge area of Bitcoin-based innovation is international remittances, Andreessen said in his article. Every day, hundreds of millions of low-income people go abroad for hard work to earn money and then send that money back to their families back home. According to the World Bank, these people send $400 billion in remittances every year. Every day banks and other financial institutions deduct a fee, sometimes outrageously high, like 10 percent of remittances.
There are no fees or charges for using Bitcoin to send remittances, but the amount is minimal. Thus, the quality of life of migrant workers and their families will increase significantly. Indeed, it is hard to imagine that such a thing would have a much faster and more positive impact on large numbers of people in the world’s poorest countries.
Moreover, Bitcoin can naturally be a great force in bringing a large number of the world’s population under a modern economic system. Currently, only about 20 countries have fully modernized banking and payment systems, while about 175 countries still have a long way to go. As a result, many people in many countries are not getting the goods and services that we get in the West. Bitcoin as a global payment system that can be used by anyone from anywhere at any time, can be a powerful catalyst for virtually everyone living in the world to benefit from a modern economic system.
A third interesting use of Bitcoin is ‘micropayments’ or ultrasmall payments. This has not been possible despite twenty years of effort. Because it is not cost-effective, it is not cost-effective to handle micropayments in the current credit/debit and banking systems. For example , less than $1, just a few pennies or fractions of a penny, etc. The payment structure of these systems did not allow small payments to survive.
For Bitcoin the matter is very simple. Bitcoin has infinite divisibility of whole and small numbers. What is currently divisible by up to eight digits after the decimal point, will be more in the future. So you can use any small fraction of currency you want, for example a thousandth of a penny, and send it to anyone in the world for free or at little cost. Take content pricing. One reason is that media businesses, such as newspapers, are struggling to value content. Because they need to either charge for the entire content or completely free.
summary
The future of cryptocurrencies hinges on effective security measures. While these digital assets offer promising benefits, their widespread adoption is contingent on addressing security challenges such as hacking and fraud. Stakeholders must prioritize the development of robust security protocols, regulatory clarity, and user education to ensure the long-term success and stability of cryptocurrencies in the evolving financial landscape.