What is cryptocurrency

  • It is a digital currency in the form of a code, sender and receivers identity can be hidden even a probe can’t through light on identities
  • Bitcoin is a cryptocurrency which is works on blockchain technology
  • Blockchain technology is a decentralised distributed ledger. When anyone holding the bitcoin sells his coin to others and a new code will generate which will enter automatically to the ledger with a link to the previous code. These codes are in the form of a block, that’s why it is known as the blockchain.

Why in news

  • Recently Bitcoin hit at the highest.
  • The Indian government has completely banned the trading of Bitcoin in India

Why Banned

  • Terror funding
  • No authenticity (The person who made the coin still unknown to people.)
  • It may crash in future which will hurt the small investors.
  • Very difficult to monitor so the government loses revenue when someone gets a huge gain.
  • What should be the wayforward
  • Given the lure of bitcoin, it can be anticipated that in future bitcoin demand will increase, so people will trade in illegal ways.
  • Rather than a blanket ban the government should regulate the trading so that terror funding can be curbed, tax can also be levied.

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