Thursday, May 16, 2019

Cryptocurrency – Good or Evil?

By now many of you are much familiar with the cryptocurrencies. For starters, Cryptocurrencies are digital currencies (Wikipedia Article), built based on the blockchain  (strong encryption) and used for transactions. Since 2009, bitcoins are widely used in several transactions. How legal are the cryptocurrencies? Are they being used for good purposes? In one of my previous blogs, we have discussed how money can do good or evil (Is Money Good or Evil?)

Few countries strictly ban the usage of Cryptocurrency and US impose a capital gain tax for the cryptocurrency. In the United States, the crypto exchanges (traders) are supposed to report the transactions to the IRS. Currently, the value of bitcoin is ~$8000. See the above Graph for the trend (in US Dollars).

                Anything new takes time for everyone to get used to it and the authorities to impose controls. The same applies to the cryptocurrencies. Currently, the controls are not strict, it is hard for the authorities to control and many countries are not concerned about bitcoins, most of the transactions (cryptocurrency to money) happen in those countries.

                So, apart from the new admirers (investors), who use the cryptocurrency? Mostly all of the darknet transactions occur in cryptocurrencies. Not only that, but these are also used in ransomware and data breach demands. A friend of mine who owns a small law firm; years ago, three of their computers got locked by ransomware, and they ended up paying bitcoins worth of ~$10,000 to retrieve their data. They even reached out to law enforcement at that time, but due to the complexity (the demand was to pay by bitcoin through darknet; which is not traceable). This is just an example; in real life, this is how the cryptocurrencies are used!

                Think about it, when you use a credit card or mobile payments, you are not carrying the currency, it is digital. Also, those encryptions are secure as well. Then, what is the difference? The banking architecture controls the regular digital money, whereas the cryptocurrency is not. So, it is easy for people who conduct illegal activities to monetize without getting caught. What do you think?


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