PROS AND CONS OF USING CRYPTO-CURRENCY
In the last segment we talked about the pre-Bitcoin era what it was and how it came to be right now. This brings us to the current segment which basically talks about the pros and cons of using crypto currency. Here are the few pros and cons which can be enunciated for being associated with the Crypto markets:
The Bright Sides:
Complete Anonymity options: It is a well settled argument that with the several layers of encryptions and everything, it is undisputed that the usage of crypto currency act as a safe haven for every quanta of transaction. The encryption which is currently in lieu with the crypto currency transaction is the "SHA 256" algorithm based encryption and in the near future if we are able to inculcate this technology with the Artificial intelligence or neural networks then we can in actuality prevent any crime for happening within a closed crypto network, for starters usage of polymorphic codes might help us to achieve the level of privacy and safety we seek from a crypto systems.
Emergence of Branch technology: Not only the usage of crypto currency will lead to the new era of technology but it can also Branch out to many tech fields like health care, robotics, machine learning, etc. The applications for the crypto currency based technology is endless. We can validate our software like in case of IBM who is working on the core concept of token based licensing which focuses on the application of a customized token for a particular software validation. The field is vast. We can teach our machine to construct a pallet savvy contracts as per the requisite of the parties and teach them to execute themselves using Ricardian cryptography and authenticate them using an Ethereum coin. The aforementioned idea is basically the core idea behind a smart contract.
Self employment: As mentioned before every bit of transaction works on a closed crypto network in order to authenticate each and every transaction, that is when the idea of miners comes into play. They are the computer resources which validate every transaction and enter it into a chain of blocks which to us is known as Block chain. In return the Miner is awarded with a new crypto currency every time which is worth some fiat money.
Potential to be used a safe replacement for fiat money: The main argument which arises out of the usage crypto currency is that it can collapse at any point of time as it is not backed by anything. The solution to this problem is that we can create a currency which can be backed by say a particular commodity which can be anything for example like in New Zealand they have created a petroleum backed crypto currency called Petro coins. There is also one very popular opinion by some of the hard core crypto enthusiast that government will never allow crypto currency to take over the Fiat money because they don't want to loose their monopoly over the hard money.
The Darker Sides:
Usage for money laundering and embezzlement: As mentioned above the Anonymity offered by the crypto leads to the untraceable trail of money laundering. Though the information present on the crypto network is easily accessible but the information is highly encrypted and it is represented in the form of encrypted wallet address and time stamp of the transaction in the blocks. It is very hard to track to generation of the source and end users. Only cryptic values in the form of hexadecimals is visible which is intelligible to humans.
Not an energy efficient solution: For mining a Crypto currency it should be noted that the computing power of the processor along with the components like HDD, graphic card etc. work simultaneously in sync with the maximum voltage input which inturn leads to high energy consumption, let's for a country like India where 60% of the population still resides in villages with poor communication as well as a very scarce power supply. So mining crypto might not be a viable way of self employment. The increment in the wattage consumption per house will lead to a disastrous effect on the environment.
Volatile currency: As mentioned above the currency in itself is very volatile, it can collapse at any point of time if the user pool remain inactive for a long time. The currency is not backed by anything so the value of the currency is not predictable, it's very difficult to predict whether the currency value will fall or rise. The investment and everything related to it is totally in the dark.
Written By,
Prajanya Raj Rathore,
B.B.A.LL.B.,
Symbiosis Law School, Hyderabad
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