Introduction
Introduction::
Let’s first dive deep into the concept of money and then contemplate the emergence of the digital currencies in this fast digital driven tech world. History teaches us that money system has evolved from Barter system (Mutual Exchange System) which existed way back in 6000BC. Money is just a medium of exchange signifying agreement and promise between two parties. With everything changes so does money! And thus the emergence of digital currency took place in late 1990’s with advancements in fields of technology.
Factors which Lead to Birth of Digital Currency::
Firstly mistakes are inevitable by Humans whereas for machines perfection is inevitable(though humans made them).So dealing with numbers and maintaining records of multiple transactions on every single day is huge load for humans to deal with and hence the digitalization of money took place and is doing reasonably good.
Secondly the rate at which work will progress i.e., the amount of time taken to make a successful transaction has reduced exponentially when compared with conventional money transaction.
Digital Currency and it’s sub-types::
?Cryptocurrency :: Digital Currency in which cryptography techniques are used to regulate the generation of currency and verify the transfer of funds.
Evolution::
?Bitcoin(2009)
?Namecoin(2011)
?Litecoin(2011)
?Peercoin(2012)
?Monero(2014)
?Capricoin(2015)
Advantages::
• Fast and cheap.
• Easy to use.
• Free to transfer and hold.
• Decentralized control-users are the only owner of cryptocurrency.
• Central government can’t take it away and there are no chargebacks.
• Privacy and Security-Anonymous payments
Risks::
• Problems of implementation
?Hardware restrictions
?Computational inefficiency
?Instability
?Deflation
?Lack of Replicability
?Growing centrality
Conclusion::
Digital currencies speeds up the process of payments and money transactions and infact makes a country free of Black money in disguise helps in reducing the corruption in the country. As every other system has few defects or drawbacks so does digital currencies.
