An Analysis of Cryptocurrency and The Legal Framework
Written by Rishika Kumari
The contemporary era is a digital era where the majority of things are done virtually. In the wake of this dawn new form of digital currency has emerged known as cryptocurrency. Crypto is a collection of binary data framed to work as a medium of exchange. Cryptocurrency has been accepted by many countries (El Salvador has become the first country in the world to accept Bitcoin as legal tender).
Cryptocurrency shares characteristics of both currency & investment, it is used for purchasing but the purchasing power is limited. “That the lack of widespread adoption, plus crypto’s volatility, limits its use as currency”, says Roger Aliaga – Diaz, Principal and senior economist with Vanguard investment strategy group. Crypto as an investment is complicated as it doesn’t quite fit the mold of traditional stock or bonds.
Many countries have completely closed their doors to cryptocurrency like China, Indonesia, Turkey, Bolivia, and Egypt. While countries like India have no official data on cryptocurrency holders.The research analysis the intricate details regarding the legal framework dealing with cryptocurrency in various countries, investment aspects of cryptocurrency, and also about the countries which have accepted and which have not accepted cryptocurrency, the demand for cryptocurrency in the international market.
Cryptocurrencies goods, such as gold or silver, do not underlie cryptocurrencies’ value. Instead, their value totally depends upon the value that other owners and investors ascribe to them. Since they are not backed by any centralized regulatory body, investors may have few legal resources if any complications arise from their crypto transactions or ownership.
Certain Terms to Know.
- BLOCKCHAIN- Blockchain is a type of database in which cryptocurrency digital transaction records are stored in groups, or blocks. A blockchain is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology,
- BITCOIN- The first cryptocurrency, one of the most popular cryptocurrencies.
- Altcoin -any cryptocurrency that is not bitcoin. Ethereum, Dogecoin, Litecoin.
- Decentralized- direct peer-peer cryptocurrency transaction to take place online security and without need of an intermediary. (Decentralized) database that is installed on systems that are geographically located in different locations but “not” linked through a data communication.
- DLT (Distributed ledger technology; A decentralized digital record blockchain is a type of DLT. Blockchain is a type of DLT, but the technology can serve a number of purposes beyond cryptocurrency trade.
- Exchange; A marketplace where you can buy and sell cryptocurrency.
- Wallet- A place to store your cryptocurrency holdings many exchanges offer digital wallets.
CRYPTOCURRENCY IN GLOBAL MARKET
Cryptocurrency with the idea of decentralization gained its popularity in the global market, but its volatility remains high and these assets carry a greater risk of losses than many traditional assets. For instance, 2017 data, in 2017, Bitcoin prices rose from about $1,000 to a high of more than $19,000 before dropping to around $3,000.Then, bitcoin again rose through the end of 2020, reaching a new high of around $60,000 before dropping again to $30,000 in the summer of 2021, cryptocurrencies offer an easy-to-use, digital alternative to fiat currency………………………………………. To Read Full Paper Click on the download button below.
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