A cryptocurrency is a digital
asset designed to work as a medium of exchange that uses cryptography to
secure its transactions, to control the creation of additional units, and to
verify the transfer of assets. Cryptocurrency is fundamentally a
decentralised digital currency transferred directly between peers and the
transactions are confirmed in a public ledger, accessible to all the users.
It is a digital currency that allows
transacting parties to remain anonymous while confirming the transaction is
valid.
The provision of anonymity is widely
misused especially in making cross-border transactions.
They are widely used as a means for
money-laundering, terror funding and drug trafficking, and other illegal
activities.
The increasing share and presence of
bitcoins due to speculative trading for return on investments is getting to be
a cause of concern.
Cryptocurrencies
are gaining popularity for the following reasons:
- Privacy Protection
- Cost-effectiveness
- Lower Entry Barriers
- Alternative to Banking Systems and Fiat Currencies
- Open Source Methodology and Public Participation
- Immunity to Government led Financial Retribution
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