Cryptocurrency

Cryptocurrency is a decentralized digital currency, which uses cryptography as its base structure. Every transaction made with cryptocurrency is stored in an online ledger known as “Blockchain” which can be accessed by everyone. It is a system that does not involve any intermediary but instead everyone can use it and can help run it. The most well-known and first ever cryptocurrency is Bitcoin, a currency that has been making headlines since 2009. Bitcoin has a limited supply at 21 million thus causing the change in price. Talking about mining, mining works similarly to the creation of money by central banks. Powerful computers are used to solve complex mathematical problems which verifies the transactions on Blockchain and in return, these miners receive a cryptocurrency as a reward. Currently there are almost 17 million Bitcoins in circulation at this very moment. The main stakeholders of cryptocurrency are investors (customers) & miners, banks (competitors), government, freelance, trading platforms organization, partners, media. However, cryptocurrency is still in a grey area which causes many issues.

The first negative consequences are in the domain of corruption and crime. Cryptocurrencies are frequently used for tax evasion. One could also remark that many investors get a return without paying tax. Money laundering is another issue in this field. To avoid illegal activities being exposed, people invest in crypto since it is untraceable. The Ponzy Scheme is a classic example of system failure. For instance, in 2014, Nicholas Gelfman told many investors that his company, Gelfman Blueprint would give them a high return of 7 to 9 percent. After which he proceeded disappear from the market after stealing 600,000 dollars from his 80 investors. Furthermore, criminal activities based from the black market involve sometimes the transaction of cryptocurrencies, which are “untraceable” outside of the network, thus to the government. Lastly the major problem is hacking. Mt Gox was one of the biggest trading platform where 650,000 Bitcoin was stolen resulted them in bankruptcy of 460 million. Additionally, 1.65 million computers are mining cryptocurrency for hackers. These problems are mainly linked to the fact that cryptocurrencies are being traded for investment and speculation.

Concerning ethical implications there are multiple issues that have come to light in the recent years. However, it is crucial to distinguish that cryptocurrencies are like any other tool and has no intrinsic value of good or bad, their impact is thus only relatable to their user and the intentions. Cryptocurrencies use a heavy amount of energy to trade and generate new tokens. The processes involved require specialized equipment. All of these lead to a high ecological impact when comparing to traditional currencies. Although Bitcoin has been claimed to be pseudonymous, issues of privacy and anonymity have been raised as all transactions are tracked