What Is Crypto Currency? How Does It Affect Global Society? Has It Been Affecting Indian Society Also? (250 Words, 15 Marks) - PWOnlyIAS (2024)

FAQs

How does cryptocurrency affect global society and Indian society? ›

Anonymity in cryptocurrency has the potential to increase crime in society. Rise in inequality: Cryptocurrency is acquired and used by the ones who belong to upper strata of the society, people who are digitally illiterate are being left behind. Thus, it can lead to a disproportionate rise in inequality.

It can also attract foreign investment in the Indian economy and boost the country's technological development. However, there are also concerns regarding the use of cryptocurrencies in unlawful activities such as money laundering and financing terrorism.

Unlimited amounts of cryptocurrency can be issued.

While some people argue this is a good thing because it takes away the control from banks and governments, it means cryptocurrencies have the potential to have a huge inflationary impact on economies and erode the ability of Governments to control fiscal policy.

Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don't have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.

Key Takeaways. A cryptocurrency is a form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities.

As one of the emerging markets for virtual digital assets (VDA) in the world, India's role in driving the adoption of cryptocurrencies has been influential. In 2023, a prominent global survey revealed that India was at the top of crypto adoption in the world, leaving the USA, UK, China, Brazil, Russia and Japan behind.

Cryptocurrencies such as Bitcoin, Ethereum, and others are not recognized as legal tender in India. However, trading and investing in crypto is not illegal. The Indian government has implemented a 30% tax on income from the transfer of digital assets and a 1% TDS on transactions exceeding INR 50,000 annually.

Investors from India need to open a global account or invest via brokerage platforms from an RBI-approved channel. Investors must transfer money using the Liberalized Remittance Scheme to invest in cryptocurrency ETFs overseas.

The combination of supply, demand, production costs, competition, regulatory developments, and the media coverage that follows influences Bitcoin investor outlook, which is one of the most significant factors affecting cryptocurrency prices.

Digital currency undoubtedly has the potential to transform the financial sector and bridge the existing geographical boundaries. By seamlessly integrating with legacy systems and offering interoperability, they can extensively assist in facilitating trade and economic opportunities for countries.

What are the risks of cryptocurrency? ›

A cryptocurrency's value can change constantly and dramatically. An investment that may be worth thousands of dollars today could be worth only hundreds tomorrow. If the value goes down, there's no guarantee that it will rise again.

Cryptocurrencies are digital tokens. They are a type of digital currency that allows people to make payments directly to each other through an online system. Cryptocurrencies have no legislated or intrinsic value; they are simply worth what people are willing to pay for them in the market.

Synopsis. Cryptocurrency in India offers financial inclusion, protection against inflation, remittance benefits, new investment avenues, fast transactions, and decentralization. However, it faces regulatory challenges, volatility, fraud risk, power consumption, and impact on traditional banking.

A cryptocurrency is a digital currency, which is an alternative form of payment created using encryption algorithms. The use of encryption technologies means that cryptocurrencies function both as a currency and as a virtual accounting system. To use cryptocurrencies, you need a cryptocurrency wallet.

A cryptocurrency is a digital currency based on a network that is scattered across a huge number of computers. The decentralized system of cryptocurrency makes it faster and cheaper to transfer money. It does not crumble at a single point of failure.

At its core, cryptocurrencies have offered a way to digitally store and transfer value in a manner secured by cryptography rather than governments and other third parties. In doing so, Bitcoin, and the cryptocurrencies that followed, opened new opportunities for people across the world.

Cryptocurrency adoption in developing economies has the potential to: Boost financial inclusion: Provide access to financial services for the unbanked and underbanked, empowering individuals to participate in the formal economy.

Some of the advantages of digital currencies are that they enable seamless transfer of value and can make transaction costs cheaper. Some of the disadvantages of digital currencies are that they can volatile to trade and are susceptible to hacks.

Indian society has maintained continuity in traditional social values through: Institution of family has ensured that traditional values pass-on from one generation to next through socialization. Collective celebration of festivals reinforces values like brotherhood, fraternity, purity, triumph of good over evil etc.