Money is fundamental to human life and economic growth. Money allows for the exchange of goods and services and quantifying them in a tangible fashion. Similarly, the concept of money helps in storing wealth and allows for valuation and comparison. It greatly expands the scope of trade and promotes uniformity in transactions whether across the border or within the country.
With the growth of technology, the concept of money and technology have emerged to create a new avatar of cryptocurrency.
Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Unlike normal currency, there is no central bank issuing the currency. A distributed ledger and blockchain technology is used to validate the transactions. The first cryptocurrency to emerge was Bitcoin. Since then, many cryptocurrencies have emerged. The value of different cryptocurrencies is calculated differently and there is no uniformity in the way they operate, as each currency has its own list of conditions. Given that this is a new area, the impact on the market is an interesting study. As a leading software developer in USA, GRhombustech has given basic inputs in this blog. We would always advice the readers to do complete research and also consult finance professionals before undertaking any investments in crypto.
1. Market Volatility
Cryptocurrencies are known for their extreme volatility in value. Prices can skyrocket to unprecedented heights or plummet in a matter of hours. Thus, returns can be high or low and there is no assured stability in the way things operate.
2. Tax challenges
Many governments do not recognize cryptocurrency as a legal form of currency. Further, many governments have enacted strict laws to curb investments in cryptocurrency or brought in taxation laws to tax the gain on capital etc. While there have been cryptocurrency exchanges and investment products like normal markets, they are mostly not completely recognized.
3. Regulatory Framework
The rise of cryptocurrencies has posed significant regulatory challenges. Because they can be used anonymously, they have been linked to illegal activities. Since the concept can be easily misused, many governments are wary and a complete framework is yet to be created. Further, while crypto operates on a global level, the same level of understanding has not yet been achieved between financial institutions, banks etc. This has made crypto a legal and regulatory soup!
4. Disruption of Traditional Banking
Cryptocurrencies can potentially disrupt traditional banking and financial systems. They offer a way to transfer funds directly between parties without the need for a trusted third party like a bank. However, crypto currencies can be manipulated and there are frequent news about hacks and attacks on exchanges. Hence, the reliability factor is less.
Why GRhombustech?
GRhombustech is a leader in offering cyber security solutions in USA and among the best software development companies in USA. We also offer iot testing services and salesforce CRM customization. Established in 2014, GRhombustech also brings rich insight to Salesforce products and solutions. Our insightful work and key implementation expertise have delivered powerful transformations to clients and created enduring value. We also offer test automation services in India and custom software development in UK.
The company has delivery centres in India at Hyderabad, Chennai and Bengaluru, and a staff strength of 200+ employees all around the globe.
For more details, please contact us.
