Cryptocurrency’s Future in India
The cryptocurrency market is broadening every day simultaneously people are making investments in different cryptocurrencies to make some profits. Recently, India’s Finance Minister announced in Budget Session regarding 30% flat tax on the gains through cryptocurrencies and NFT(Non-Fungible Tokens). However, this announcement clarifies that cryptocurrencies are legal in India but may lead to the non-conversion of Cryptocurrency to national fiat.
What is Cryptocurrency?
Many people are skeptical about cryptocurrency. So, it is a digital or virtual asset used as the medium of exchange. All the transactions performed are secured by cryptography(the content connected in a way that it would be visible to sender and recipient only). The cryptocurrency transaction takes place through a distributed computer network(blockchain). The transactions are verified and recorded through mining.
Some of the unique features which are provided by cryptocurrencies are:
- A decentralized network(no central authority).
2. Provides Anonymity- as all the transactions are performed using the Virtual ID of a user.
3. The Transaction fee is cheaper than usual.
4. Help in international transactions.
What are Blockchain and mining?
Mining involves the process of solving a complex puzzle. Users perform transactions that are verified and recorded with the help of an algorithm. Various algorithms are used for mining like SHA256(used for Bitcoin, Bitcoin Cash), Scrypt(used for Litecoin and Blackcoin), Ethash(used for Ethereum), etc.
Whereas Blockchain is a database shared between a group of non-trusting individuals without demanding a central party to maintain the database. It can be assumed for understanding that the blocks of data are connected in a chain.
Cryptocurrency vs Fiat Currency
Cryptocurrency is a digital currency and non-tangible currency. It does not have any central to regulate it and is secured by cryptography and blockchain technology.
Fiat Currency on the other hand government-issued currency and regulated by a national central bank. E.g. RBI in India. It has a physical presence.
Cryptocurrency trading options available in India
There are various cryptocurrencies trading options in India such as Zebpay, Paxful, Binance, etc. Bitcoin was the first decentralized cryptocurrency that was invented by Satoshi Nakamoto. It is one of the most trusted cryptocurrencies in the world.
Cryptocurrency future in India
As per the recent announcement regarding tax, the people would be reluctant to the conversion of cryptocurrency to national fiat. This will lead to storing and performing the transactions in cryptocurrency only. This decision will open the doors to tech-savvy and innovation-minded investors. It will pave the way for DeFi (Decentralized Finances) in India i.e, Decentralized financial services such as borrowing, lending, buying insurance, trade assets, etc. The new form of wealth creation will take place without any central authority. It will create a parallel market to the centralized market. People will get more sectors where they can invest.
However, due to the fluctuations taking place in cryptocurrencies, people should rigorously invest in cryptocurrency for the reason that we do not have much history regarding cryptocurrencies.