Sunday, May 22News That Matters

Is cryptocurrency the new currency?

Cryptocurrencies are not a form of money or an investment. They must be thoroughly examined. There has been a lot of excitement recently about investing in cryptocurrencies.

Let’s determine whether a crypto investment is a currency or an asset. Any instrument that wants to be classified as a currency must have the following characteristics: A promissory note. The issuer promises value to the bearer or holder. Two, because it is backed by a sovereign nation, there is never any risk of the guarantee not being fulfilled. Three, currency printing, whether real or digital, is always dependent on a physical item, such as gold or a basket of goods. It is apparent from the preceding that cryptocurrency will never be a currency.

Can cryptocurrency then be classified as an asset? A tangible asset is something that has monetary value. An item should have some concrete benefits, even if its immediate utility is intangible. The cryptocurrencies currently being touted – bitcoin, litecoin, and ethereum — are nothing more than virtual currency. When it comes to cryptos, proponents always bring up blockchain technology. Except that cryptocurrencies’ digital exchange is recorded in blockchain format, this technology is essentially a system for accounting for transactions and has nothing to do with cryptocurrencies. In other words, blockchain technology is used to store and transmit points gained through a gaming application.

Even the points obtained in a ludo game, however ludicrous it may appear, can be portrayed as cryptocurrency if they are kept and sold via blockchain technology by the people who monetize these points. As a result, cryptocurrencies are worthless and cannot be called assets. Euphemisms for gaming include mining and finding the nth root of an equation.

I had come across frauds like multi-marketing schemes, chit funds, and deposit frauds while reading the news on the CBI and then the Enforcement Directorate. These schemes pretended to be timeshares, gold, and land investments and promised large profits. To get around the legislation, these pyramid scams were run over a long period. Despite this, fraud might be detected, cash trail followed, and the culprits identified.

Crypto promoters have taken deception to a new level, with little chance of being detected because no one is offering anything. The people or people that release the game or equation from which bitcoins or cryptocurrencies are to be mined are one part, and the exchanges where these points — cryptocurrencies — are sold are the other. These so-called cryptocurrencies are only acceptable if they are tied to a country’s conventional currency. Unfortunately, millions of people around the world are falling for this scam. Criminals, especially drug cartels, will dress up in crypto to drain and launder their illicit funds.

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