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The dark side of Cryptocurrency

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  • Difficulty Level : Basic
  • Last Updated : 06 Feb, 2020

Cryptocurrency still rules the software market till date. Yet like a coin has two sides, cryptocurrency too has a dark side. Let’s see this in detail.

Cryptocurrency is a form of digital currency which has no physical form. It contains of a block which has all the transaction details and a chain which secures the block forming a blockchain. As the transaction goes on, a huge network of blockchains form. We have various currencies across the globe.

In the same way, cryptocurrencies are of various kinds. Bitcoin, Ethereum, Litecoin, Stellar Plenum are some popular among the cryptocurrencies. They are not directly available to us. One must mine them using a supercomputer, uninterrupted electricity and mathematical knowledge. The miner is given an encrypted code which must be decoded in order to gain the currency. Many organizations prefer cryptocurrency to transfer huge amounts.

There are many people investing on these cryptocurrencies. While it has bought huge profits, there are some drawbacks about it making it a ban in countries like India.

  • Security:
    No one can assure security to these currencies while it is being transferred. They might even get stolen in some cases.
  • Rise and fall:
    Consider a person A. He wants to invest in Bitcoins and he gets huge profits. Thinking that be might gain profits even this time, he invests in them and gets losses. The conclusion is that we cannot determine the rate of a cryptocurrency as it keeps fluctuating making it another drawback.
  • Anonymity:
    While money is being transferred, there are chances of money being stolen away.It becomes quite difficult to trace the theif. Hackers are the middlemen who are benefitted due to this. They can steal huge amounts without our knowledge. Huge organizations might have more losses if this happens.
  • Banking institutions:
    There is no involvement of banking institutions making it a drawback. In case of money loss, there is no refund option available in case of cryptocurrency.

    Therefore in countries like India, RBI or The Reserve Bank of India has issued a notice stating that they are not responsible if any loss occurs thereby no refunding is done by them.However there are many countries like America investing in cryptocurrencies and making it legal. While cryptocurrency has a huge scope in the coming years, it is not guaranteed that the money is safely transferred among people. There might be losses and an alternative might be discovered for this. Inspite of the drawbacks, cryptocurrency will start to rule all the sectors in the future.
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