Cryptocurrencies refer to a asset designed digitally to work as a medium of exchange that uses strong cryptography to ensure security to financial transactions, controls the creation of additional units, and verifies the transfer of assets from one source to another. Cryptocurrencies use a decentralized control system, unlike centralized digital currency and central banking systems. The decentralized control works using a distributed ledger technology, like blockchain.
To be considered as a form of cryptocurrency there are certain requirements that are to be considered by the system-
- The system should not require a central authority.
The state is maintained through distributed agreement.
- The system must keep a summary of the cryptocurrency units and their ownership.
- The system defines if a new cryptocurrency unit can be created.
If a new cryptocurrency unit is created , the system defines the circumstances of its origin and determines the process of ownership for the new units created.
- The ownership of a cryptocurrency unit can be proved cryptographically, only.
- The system performs transactions by changing the ownership of the cryptographic unit.
A statement for the transaction can only be issued by a person who can prove that the current ownership of these units belongs to him or her.
- If two different instructions for changing the ownership of the same cryptographic unit is simultaneously received then the system performs for only one of the entries made.
That being defined, the first decentralized cryptocurrency in the market was Bitcoin in the year 2009. It was all in hype as everyone could use it without actually having a registered log for the transactions made. They are used outside banks and without concerning any government institutions. It is mostly the internet that handles the transactions in cryptocurrency units. A cryptocurrency can be exchanged for another unit of cryptocurrency. It can also be used in exchange of one’s asset.
However, the more we use cryptocurrency, the more we come under influence or threat of the dark nature of it. It indefinitely leads us towards the way it can be used in areas of dark market that marks the start of economic degradation.
Transactions made via using cryptocurrencies are independent of banks and government institutions. Therefore, this makes evading taxes easier. As no recipient report is sent to the revenue service, this ensures that transactions of lump sum are made and not chartered or accounted anywhere. This in turn reflects on the economy of the nation. Which further leads to unregulated global economy.
The use of cryptocurrency also results to the increase in the amount of web criminals. The use of this virtual money propaganda is a shelter to the budding criminals who can commit crimes against humanity, get paid without the knowledge of any authority and go about spreading horror and crime without realizing the trauma they cause regular people. The use of cryptocurrency can soon result in to building up a society of terrorism and chaos.
Not only it is out there to corrupt the minds of impressionable people, it also results in a huge amount of theft.
The 2014 case of Mt. Gox, which was the world’s largest exchange system still stands as a testimony of the loss one can face using cryptocurrencies. Mt. Gox suffered bankruptcy and lost about 473 million dollars for that. Another time in 2017, Tether Cryptocurrency was hacked into and 31 million dollars was stolen from their primary wallet. 2018 stands witness to another such case, where Bitcoin Gold lost around 18 million dollars.
Hence, the use of cryptocurrencies not only results in criminal activities but also initiates economic loss on a national scale and acts a threat to this era.
However, we cannot overlook the fact that the creation of this was only to make life easier for us. When we use cryptocurrencies, our identities stay encrypted. The biggest benefit of this system that maintains privacy is useful to people working in the adult industry , which is still professionally considered a taboo. When banks refuse to help people from this profession, their biggest savior is the ongoing system of cryptocurrencies. It not only helps them to get paid for their services provided but also, keeps their privacy.
In this world split into black and white, we cannot solely blame the use of a tool like cryptocurrency to cause havoc. As much as it is a possible medium that creates way for people to get in touch with the dark web, it is also one’s will that governs one’s actions. The decisions we make are ultimately our own and not someone else’s. Therefore, considering cryptocurrencies as a national threat would equally determine the nature of the nation. The threat only becomes to power when we use it that way, if we let it be, it is nothing but a mere perception of our mindsets.