The Concept Globalization
The financial markets play a major role in growth besides, balancing the financial economics of the country. The financial sector of the world economy is witnessing a rapid change through the new entrants such as Cryptocurrency market. Some believe the blockchain and digital currencies enhance the growth while, others assume it’s a bubble and disrupting the process of economic development. Well, the discussion and debate may go on until the world economists and financial management come to a conclusion.
Earlier, the innovative minds were never regarded, ignored and least considered for a debate. Now, concepts and ideas of young enthusiasts and entrepreneurs are more in focus and appreciated with the modern technologies. The views and ideas are now witnessing the virtual possibility that can be utilized through digital technologies. Surprisingly, the concept of digital currency paved into the business and trade. And the issue of the Cryptocurrency isn’t an idea, but realized as a reality in a few developing countries.
The incredible concept was materialized and programmed as a software product by Mr Satoshi Nakamoto and released his virtual currency software. He designed a digital currency and termed it a ‘Bitcoin.’ Since 2009, it’s used as an alternative to the other currencies in the international markets. Bitcoin is a virtual reality now, a new currency and digital wallets are in use for the past few years. Trading and the transactions are global and are in consideration by some business conglomerates. The convenient facility attracted people and aspirations ran wild for digital financial investments.
What is a Bitcoin? A bitcoin can be assumed as a coin like the precious metals of gold, silver and platinum. Consider it as a virtual coin and with no exact intrinsic value. The price of one coin is determined by the buy or sell, and demand and supply. One bitcoin is divisible up to 8 decimals and divided into bits. Each bit’s called a ‘Satoshi’ (1 Satoshi = 0.00000001 ฿) and a fraction can also be bought by small investors. Buying, selling, and trading of these coins are done by converting the physical money to acquire the digital currency through the crypto exchange.
The method and process of transaction used is through peer to peer (P2P), the technology used for bitcoin transactions and the system is run by the users on the secured platforms. It’s a decentralized payment process without involving the banks, or the governance of the financial controllers. Being open source software, bitcoin miners protect the system from the hackers, besides safeguarding their earnings by mining the bitcoins.
In P2P technology, every PC works as a node and a server. Every transaction of buy, sell, sending and receiving doesn’t need an intermediate agent to handle the task. All transactions are hashtagged and securely transmitted in a block to the public ledger—a blockchain. The deposits/receipts are stored in the digital wallets. A digital wallet is a software application that stores the online purchased items.
The advantage of the cryptocurrency is it doesn’t require paper hence, the cost of manufacturing and printing may be minimized. The transaction fee's nominal and a large amount of money—bitcoin and other coins can be transferred within minutes. Currency can be transferred across borders without remitting the conversion and transfer charges.
The digital transfer is the international concern as it may be used for funding the terrorists and anti-social activities. The transactions are not easy to crack or intrude as it’s written in algorithm keys and usually one-way using hashcash SHA256 function.
The digital currency is more volatile and its intrinsic value depends on the trade, demand and supply. If the digital currency exceeds the market value then, it may lower the net worth of the money. The most feared aspect is when it loses the value; it can never be realized and can’t approach the court for justice.
People are interested in investing in the four major currencies, Bitcoin, Ethereum, Litecoin Ripple and the present turnover’s approximately 85 billion USD. A few countries are yet to accept, adopt the new trade of the Cryptocurrency and still working on the legitimacy and vulnerability of the digital currency.
Meanwhile, a few self-regulated trading platforms and exchanges are established. Until now, only a few countries have come up with the issue of legalizing the digital exchanges. In India, some think heads are pointing, rather referring the RBI and FEMA acts. The government is trying to impose taxes on investment and returns of the investors who trade and invest in digital currencies.
One of the trading platforms in India reported an astonishing five thousand downloads of their app on a day last year. So, basing on the app downloads an average investment of Rupees one thousand by an investor to get a fraction of bitcoin, it results in a turnover of eighteen lakh rupees per annum. At present, the net worth of bitcoin is more than 110 billion in the international markets.
The digital currency platforms being open source are organized and well secured by the perfect mining software engineers. Despite, the availability of best software professional, the reputed organizations couldn’t stop the hackers.
It’s a wonder; a concept was successfully globalized by Mr Satoshi Nakamoto.