Digital Currency – Learning with it or Learning from it?

During Stone Age, humans were quite young with limited thinking capabilities, at that time there weren’t any mode of money or any currency system. Basically no selling or purchasing of items, only hunting and sharing so as to survive the different seasons. But gradually with changing times and evolving human brain functionalities, the concept of Barter System was created.

Barter System was nothing but exchange of goods for goods. In Layman’s term, people exchanged services and goods for other services and goods in return. Bartering doesn’t involve money which is its advantage. In modern world the system is still in effect – a common example being internet. Compared to old world where this system was limited to relatively small geographical area, in the present era this system operates worldwide. For instance ‘ebay.com’ where barter trading is done by the people selling their items that may be old/new/rare for a reasonable price.

After the successful tenure of Barter System, finally Currency was introduced. Dating back to --- It’s a generally accepted form of money, usually composed of coins and paper notes that are issued by government and circulated within a country and its economy. It is used as a medium of exchange for goods and services. The common example that can be taken here is – purchasing an item by giving the money to the respective seller. Nowadays the value of money increases or decreases based on global economy. Different countries have different types of currencies in circulation, for example US Dollar, Great Britain Pound, Indian Rupees and many others.

In recent times we are seeing that globally, ‘technology’ has been prospering at immensely high speed. There were times when we had wired telephones where one had to rotate the dial several times just to make 1 call but today they have been replaced by touch screen smart phones that make a call in a jiffy. And not only in this specific field, there have been drastic changes in other fields too where ever technology is incorporated.

Technological advancement led to formation of digital currency. As the name suggests a type of currency that exists digitally rather than banknotes or coins. Similar to physical currencies, but can allow trading of physical goods using digital cash (example of ebay.com as mentioned earlier). In recent years we have seen many governments pushing the idea of digital currency among its people. Numerous banks worldwide are doing digital transactions regularly. But the question arises is that why they’re asking people to do so? The answer is quite easy to understand-

On the contrary to physical currency which could be counterfeit or could be easily stolen/damaged and limited to the boundaries of a country, digital currency is:-

1. Highly secured – the transactions and transfers between any two persons are highly encrypted and made secure. So it’s quite impossible for any third person to make any payment from your account. Until and unless you have shared the information of your account with someone else.
2. Quick and Easy payments – payments using digital currency is very easy, just login to your account and pay or put in your credit/debit card details and receive a One Time Password to your registered mobile number (to authenticate it’s you or not) and pay.
3. Identity theft – nobody can steal your personal information from merchants, which ensures the privacy of your sensitive data.
4. No paper work required
5. Operates worldwide

Then comes the concept of Cryptocurrency. Made up of 2 words, ‘Crypt’ as a part of cryptography dealing with analysis, deciphering of codes or ciphers (secret coded messages) and ‘Currency’. In simple terms Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency.  Bitcoin is generally considered the first decentralized (without a central bank or authority to regulate it) Cryptocurrency system designed to and for online users to do transactions through digital units of exchange without the need of intermediaries is called as Bitcoins. Bitcoin has its own pros and cons-

Pros-

•  Fast Settlements – no need to wait a couple of days to receive the money.
•  Lower fees – as compared to any bank gateway which charge a small sum of amount for every transaction you make, cryptocurrency’s cost are nil or negligible.
• No Inflation – since it’s decentralized, economy changes doesn’t affect the value of it.
• Private – you don’t have to share your identity or whereabouts to the government when doing any transactions. So you can remain anonymous to them.

Cons –

• No refunds
• Black Market activity can/may damage its reputation
• Exposure to Scams and Frauds
• Can be replaced by some other Cryptocurrency in coming future

Still in modern scenario Digital Currency is not known by many mainly due to 2 reasons –

•  Lack of Knowledge (people are not aware of it or how to use it, therefore making themselves prone to hackers)
• Not Widely Accepted (still, many websites and companies don’t accept digital currencies as mode of trade)

Again the questions arise – What are we learning with the newly implemented digital currency? And what have we learnt from the newly implemented digital currency?

In this case, the Judge and the Jury are the people itself who have to learn from the mistakes and learn with growing demand/need to implement for their better aspects in future.