Cryptocurrency: The Revolutionary Future Money

Abstract

The standing of a currency is measured by how sound it serves three main purposes, viz.: i) measurement of economic value (for which a currency has to be fungible, divisible & countable), ii) medium of exchange (accepted as legal tender by buyers and sellers) and, iii) store of value (feel secure with its buying power). So, broadly, the currency can be in any one of the three forms, commodity money (having intrinsic value, like, silver, copper etc.), a fiat currency (coins & paper notes, backed by govt.) and cryptocurrencies, a digital currency. And, if rise in market capitalization and popular interest is the definition of success, cryptocurrencies have undoubtedly succeeded. The invention of internet and rise of computational power that allows algorithms to programmatically issue currencies, have given a new breathe to this monetary artifice. With this backdrop, the present paper is an attempt to trace the path of digital currency, starting from its background, emergence, functioning, and its galaxy and understanding the risks involved. The soaring returns evidence its attractiveness with caution about its pitfalls and challenges ahead. The study concludes that one should comprehend its speculative nature before investing and trade at one’s own risk.