The Rise of Bitcoin 🪙
Cryptocurrency has been hot on the news for quite a long time now. You all must be wondering what the heck is going on in this crypto world right now. From Ethereum to bitcoin, from price crashes to price rising towards peaks, we will be covering everything about the cryptocurrency world that is happening right now. But before diving deep into that, let’s start from the start. First, we will see What exactly cryptocurrency is and how it came into existence, and then we will see what’s going on right now.
Where it came from?
Just after the global financial crisis of 2008, the year 2009 marked the birth of a new digital era with cryptocurrency. Our beloved Bitcoin, the king of cryptocurrencies, is the first decentralized cryptocurrency that started as an open-source project in 2009 when a paper, Bitcoin — A Peer to Peer Electronic Cash System, was posted to a mailing list discussion on cryptography. A mysterious man did it with the name Satoshi Nakamoto. However, surprisingly it was a fake name, and the real identity of this man is still a mystery to this date. Although, even before 2009, there have been multiple attempts at creating cryptocurrencies like B-Money, Hash cash, and Bit gold. Sadly, all of them failed. It is only after bitcoin that cryptocurrency became huge and well known.
What exactly is it?
A cryptocurrency is essentially a digital asset designed to work as a medium of exchange built on the technology of blockchains. It is a digital alternative to our conventional currency like Rupees, euros, and dollars. The critical difference between cryptocurrency and traditional currency is that cryptocurrency exists only in a digital regime. Their copies can be created quickly and hence are difficult to secure with a high risk of theft. Other than that, cryptocurrency is decentralized. There is no regulatory body, which means it is not under control like other currencies that banks regulate.
How did it become huge?
Bitcoin has shown tremendous growth over all these years as ₹100 worth of bitcoins purchased in 2010 would be worth more than ₹ 10 crores today. Bitcoin has faced a lot of criticism throughout due to its regulation issues, but slowly the perspective is changing. A gradual increase in the number of places where we can use bitcoin leads to this increase in popularity and price. Recently, many companies are converting their cash treasuries into cryptocurrency.
The Elon-Bitcoin Saga
So, we have discussed a lot about Cryptocurrency, which has been fun as we may also think of becoming wealthy in the future, so this would be an excellent platform for doing so. Well, now you will be amazed how crypto’s trend can be fluctuated by a person. It would be hard to believe how a single person can influence cryptocurrency’s fluctuation, and he is none other than Elon Musk, one of the wealthiest people in the world. Musk’s series of pronouncements on cryptocurrency, usually through Twitter, has influenced or triggered price fluctuations. The outspoken proponents of Bitcoin are having a hard time due to Elon Musk’s tweets. First, Musk’s announcement last week that Tesla won’t accept payment in Bitcoin triggered a 17% slide in the world’s most popular cryptocurrency. Second, Tesla CEO has taken it upon himself to counter pro-Bitcoin arguments through environmental questions attached to Bitcoin mining. On May 13, Musk reversed his earlier decision of Tesla selling vehicles in exchange for Bitcoins. This has now sent tremors in the crypto world, leading to a fall in Bitcoin prices. A month is a long time in the world of cryptocurrency. After recording a high of $64,800, Bitcoin, the world’s most popular and volatile cryptocurrency, dived over 50 percent from its high in April to as low as $30,681 on May 19, bouncing back to $37,002 at the day’s end. It was not the only one. The cryptocurrency sector experienced mayhem losing over $177 billion in market capitalization on May 19 after Bitcoin and Ethereum reported the largest single-day price drop since March 2020 as China banned its financial and payment institutions from providing cryptocurrency services.
As Reuters reported, the fall could have been even more significant, but for the support of two of the biggest backers of cryptocurrencies — Tesla Inc. chief Elon Musk and Ark Invest’s chief executive officer Cathie Wood. The former tweeted a diamond emoji indicating that bitcoins are safe investments.
What’s the stand of Indian government on cryptocurrency?
RBI has continuously warned cryptocurrency users and traders about the risks associated with this new system and Finance Ministry said Bitcoin and other cryptocurrency are not legal tender which also created a huge fall of 80% in Bitcoin in one year, however, the Prime Minister, Narendra Modi, indirectly gave a thumbs up to cryptocurrency on 2nd July 2018 with his ambitious picture of Digital India.
Why are cryptocurrencies so popular in India?
The demand and popularity of cryptocurrencies have grown massively in India and here are some of the reasons why cryptocurrencies are so popular:
1. No Human Involvement
2. Ease of use and transparency
3. Secured transaction
4. Speed of transaction
Crypto exchange was reported to have grown over ten times as it used to be, giving a 47% growth for Q1 2020. More so, the United States-based crypto market exchange liaised with that of India, providing access to crypto-to-crypto conversion and trading services from April. A lot of investors found safety in digital currency as traditional assets declined due to the coronavirus pandemic.
Regardless, in June 2020, the government reconsidered banning crypto based on a report, moved by the finance ministry for inter-ministerial consultation. However, the crypto exchange executives reverted that cryptocurrencies can be regulated as commodities, and the nation will suffer rivals from businesses, traders, and enthusiasts based on their constitutional rights.
Cryptocurrency is now used to make online purchases or even physical products and provides an excellent opportunity for business holders and companies to monetize various digital applications. To date, more than 8 million people in India have used cryptocurrency and the numbers are likely to grow exponentially in the coming years as a result of upcoming economic reforms. India is a vast market for cryptocurrency, such as Bitcoin, which has already been established. The GoI seems to be ready to formulate a system for regulating cryptocurrency as part of the Indian economy. With so many companies and investors already trading in crypto, and the countless opportunities remaining to be explored, little help and support from the government can turn crypto into a principal asset for the Indian market in the coming future.
