What is Cryptocurrency? How does it affect global society? Has it been affecting Indian society also? (250 words) [2021]

Cryptocurrency is a digital or virtual currency that uses cryptography for secure financial transactions. It is decentralized, meaning that it is not controlled by any government, central bank, or financial institution. Instead, it relies on a network of computers to validate and record transactions on a public ledger called a blockchain.

Impacts of Cryptocurrency on Global Society:

  • Increasing usage of cryptocurrency is economically integrating the global society
  • Cryptocurrencies take away the sovereign power of issuing currency
  • Cheap and faster transactions in cryptocurrency can increase capital mobility and volatility, posing risk to macroeconomic stability
  • Cryptocurrency has emerged as a new asset class, but fluctuation in value can create inequality
  • Anonymity in cryptocurrency can increase crime and be used by terrorist organizations and drug cartels
  • Cryptocurrency can leave digitally illiterate people behind, leading to disproportionate rise in inequality

Impacts of Cryptocurrency on Indian Society:

  • Emergence of a new cryptocurrency community and related job opportunities
  • Remittances can be cheaper with cryptocurrency
  • Cryptocurrency is a fad among Indian youth, but carries risk
  • India has been a victim of ransomware attacks where ransom was collected in cryptocurrency

There is a need for a proper regulatory framework to utilize technology behind cryptocurrency while avoiding negative consequences.

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