Essay on Cryptocurrency

Published: 2021/12/01
Number of words: 572

Cryptocurrency is a currency in digital form. It’s virtual and secured with a cryptography that makes it infeasible to imitate. It is named ‘cryptocurrency’ due to the encryption techniques used to secure the network. They are not under the issue of any central authority and thus are immune to intervention or influence by government. Most cryptocurrencies are in form networks not centralized and are based upon blockchains technology. This technology works like journal and is enforced by a computer network with different features. Blockchains further ensure the integrity of transactional data. Cryptocurrencies are criticized due to some of their capable use such as for illegal activities, inconstant rate of exchange and possible susceptibility to attack. On the other end, they are advantageous in ways such as being portable, transparent, resistance to inflation and divisibility. Cryptocurrencies systems ensures secure payment represented only in virtual form and kept in a daybook which is stored in the internal records of the system. These entries are safeguarded by crypto (E.G; elliptical curve, hashing functions and public-private key pairs), which is an encryption algorithms and cryptographic technique. Bitcoin launched in 2009 by individual/group known as Satoshi Nakamoto marked the foremost block-chain based cryptocurrency as well as the most common and precious. The figure in circulation fluctuates frequently, however to curb inflation and manipulation, only 21 million bitcoins have been put to existence. Currently there are thousands of cryptocurrencies and have various specifications and functions. Most being new currencies designed in their own, some of them are bitcoin clones or forks. Internal Review Service considers cryptocurrency a financial asset despite presenting itself as a form of money. When one profits from trading the government deducts a piece of it. Advantages of cryptocurrency include easy transfer of funds from one party to another without the need for a trustee. Funds are transferrable with minimum processing fees and allows avoidance of fee charged for wire transfers. Disadvantageous in that its nature is suitable for illegal activities such as money laundering.

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Cryptocurrency has contributed largely to the big four government agendas. Example is the agenda of manufacturing. Many investors would be attracted to set up and run industries in the country as the movement of funds would be secure. The quick movement of the funds would see to a quick growth of the manufacturing sector. Further government would be able to keep a track of its records over several years. The transaction between government and different manufacturing firms taking contracts would be quick save and the process can be traced easily. This would ensure contractors won’t elude with government money. Further large funds would be moved improving the congestion which could have been accompanied with other forms of wire transfers for large sum of money during transactions. Cryptocurrency would see to it that manufacturing sectors incur very minimal charges during transactions thus encourage/enable small manufactures to grow and expand. Due to the high privacy insurance, government would interrupt least the manufacturing firms in terms of taxes and other levies.

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  1. Bitcoin. “Satoshi Nakamoto`s Brilliant White Paper Turns 9-Years Old.
  2. CoinbaseBitcoin Price.
  3. CoinMarketCap. “Global Cryptocurrency.
  4. Us Department of the Treasury. “The American Families Plan Tax Compliance Agenda.

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