Cryptocurrencies: How the investment scenario has changed and its impact on economies in Future?

A cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions.

Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created.

 

Bitcoin:

This cryptocurrency is one of the first digital currencies to use peer-to-peer technology to facilitate instant payments.

Bitcoin mining is the process through which bitcoins are released to come into circulation.

HOW?  Basically, it involves solving a computationally difficult puzzle to discover a new block, which is added to the blockchain.

Bitcoin is akin to cryptography.

Cryptography is a method of storing and transmitting data in a particular form so that only those for whom it is intended can read and process it. Cryptography involves generation of new codes that allows information to be kept secret. There is a total of 256 different characters from which one can make a code. It’s a unique identification number coded from 26 alphabets and digits 1 to 10. Coding is becoming difficult and difficult because ease of making codes is getting difficult as I said it can’t replicate other code and has to be completely different.

Example: The difficulty levels of our subjects at creches were very easy as compared to today; Similarly, is bitcoin coding, in the beginning, its coding was easy when Santoshi built. Now every code has to be different to make it unique identity code. The making of code is getting difficult and difficult as it progresses. Making bitcoin is like a tip of iceberg whereas its reverse engineering is like hitting head on the wall.

Various cryptocurrencies and their prevailing rates as on 18-Jan-2018 at 20:00 hours.

Bitcoin	$ 12008
Etherium	$ 1086
Ripple	$ 1.622
Bitcoin cash	$ 1882.22
Litecoin	$ 204.09
Neo	$ 156.11

Yes, the investment scenario is changing with every passing day. Investors are eager to invest in Cryptocurrencies after seeing the surge in Bitcoin. Lately one of the exchange has also started derivatives of Bitcoin. Though the underlying concept of Bitcoin is hazy to everyone but with the rise of it, they are getting part of it. Bitcoin’s price has been growing for almost 7 years now, despite some small crashes along the way but it hasn’t failed. It is gaining people attention in a massive way.

Investing in cryptocurrencies doesn’t seem a good option. It doesn’t have any underlying and the way its value is being defined is quite absurd. No doubt the rationale behind this superb but that has no relation to the money. Money is simply getting revolved due to demand and supply.

Facebook, Microsoft the tech giants have also taken the exposure of cryptocurrencies but for a different use. They are creating a unique identity for their customers with the help of blockchain technology. In India, Reliance & Kotak are also planning to roll their own cryptocurrencies. After its long successful run investors are considering it as a safe haven.

Cons:

1. Non-regulated.
2. Fraudulent activities which are turning trap for investors.
3. The underlying is yet clearly unknown so intrinsic value concept is unborn.

Conclusion:

Investment in bitcoin isn’t viable but the technology used in cryptocurrencies is flawless and secured.

People investing blindly as it doesn’t have any underlying.

Illegal activities are getting promoted with very steady pace when people making their black money white through this route.

The value of national currencies will turn obsolete if such kind of instrument will be legally traded.

The bubble that society is seeing right now is not just about Bitcoin – nearly all cryptocurrencies are seeing huge gains in short periods of times with arguably no changes to their fundamentals. In the cryptocurrency world right now, there are over 1,300 different coins.

 

Case:

Bitcoin and the rest of the cryptocurrency market continue to rise, an increasing number of critics have compared this BTC surge with the Tulip Mania that gripped the Tulip mania in the early 17th century. There is no doubt that the current boom which is being seen across most cryptocurrencies is a bubble, but it is not one comparable to the Dutch situation.

Tulip Mania is a perfect example of speculation driving prices to absurd levels as the flowers have barely any intrinsic value. Applying the same principle to Bitcoin is debatable at best.

The tulip bubble happened over a significantly short period of time, with the most price growth occurring within the space of 3 or 4 months before it peaked. In comparison, Bitcoin’s price has been growing for almost 7 years now, despite some small crashes along the way.

The bubble that society is seeing right now is not just about Bitcoin – nearly all cryptocurrencies are seeing huge gains in short periods of times with arguably no changes to their fundamentals.

Opinion:

In the era of the 17^th century, it was TULIP and in the era of 21^st century its Cryptocurrency. If people would have understood in the 17^th century then it wouldn’t have been a bubble. According to me, it’s unique technological bubble. When the reverse engineering of cryptography will become possible the next day itself investors of crypto’s will shout IMPOSSIBLE.

#akarshchauhan