The Statesman: The Cryptocurrency Conundrum

Investors are contributing to Bitcoin’s rapid rise. Bitcoin and Ethereum are among 900 digital currencies based on algorithms issued by private creators rather than governments. Such currencies and their software offer blockchain capabilities. “The safety, integrity and balance of ledgers within cryptocurrency systems is maintained by a community of parties referred to as miners,” Vasu Garg explains for the Statesman. “Members of the public add these transactions to the ledger in accordance with a particular scheme of time-stamping using their computers to help validate and time-stamp transactions.” Holders of bitcoin and the other currencies have password keys, hackable if too easy, and digital currency firms offer offline storage for protection. Rapid rise in worth raises concerns about a Ponzi scheme while other aspects seem to be a reverse-Ponzi: The Bitcoin system specifies that new coins added are halved every four years until they eventually become zero. Acceptance of the currency for the exchange of goods and services is slowly evolving, and there are possibly 6 million users of cryptocurrency with total market capitalization greater than $100 billion. Some countries ban the currencies, and others extend recognition. The online currency is attractive for investors in nations with high inflation rates or troubled economies like Zimbabwe or Venezuela. Cryptocurrencies allow fast, anonymous exchange, and Garg concludes, “Governments are aware of the dangers of leaving the control of cryptocurrency outside the regulatory mechanism for too long.” – YaleGlobal