Answer: 

Introduction:

A cryptocurrency is a virtual currency secured by cryptography. The cryptocurrency works on blockchain technology and is free from control of any central authority.  It is designed to work as a medium of exchange wherein individual coin ownership records are stored in a computerized database.

Cryptocurrency is a new emerging technology which is revolutionizing the way people make monetary transactions.

Body:

Crypto has affected global society in multiple ways, like:

• Greater integration: Currently, the world is divided in terms of different currencies. Crypto bypasses this division and is increasingly becoming a sought-after way of transacting globally thereby integrating the global society.
• Crypto as an investment: Cryptocurrency has emerged as a new asset class and is seen as an alternative to gold. However, fluctuation in the value of cryptocurrency has made both kings and beggars.
• Cheaper and safer transactions: For consumers, transferring money becomes a lot cheaper and in certain instances, safer as well, as transactions cannot be replicated.
  • Due to the ease and speed of transaction it allows, crypto has empowered relief efforts in Ukraine. Ukraine accepts millions of dollars in donations via digital currencies and many Ukrainians have been drawn to cryptocurrency as a place to invest their money as there is no strong stock market alternative.
• Government control over economy reduces, reducing the hold on the society: Cryptocurrencies take away the sovereign power of issuing currency making economic policy ineffective and diluting the bond between citizen and government.
• Crypto is used for funding activities that destabilize society: Crypto is used by terrorist organization, drug cartels, money launderers, etc. which negatively impacts society at large. Anonymity in cryptocurrency has the potential to increase crime in society.
• Rise in inequality: Cryptocurrency is acquired and used by the ones who belong to upper strata of the society, people who are digitally illiterate are being left behind. Thus, it can lead to a disproportionate rise in inequality.

Effect of Crypto on Indian Society

Crypto is still in a nascent phase in India, with a huge uncertainty about its future. Recently, the government brought a Cryptocurrency Bill to create a sovereign digital currency and also to control the proliferation of private cryptos. Following are the effects of crypto on Indian society:

• Rise of new crypto community: With the rise of cryptocurrency, a new crypto community has emerged – that includes amateur investors, professionals and jobs have come up in the society. Example: Multiple crypto-exchanges have come up.
• Risk averse behavior among youth: As an asset, cryptocurrency has offered huge returns in the past, so it has become a fad among Indian youth to invest in these volatile assets, overlooking the risk associated with it.
• Crypto as a means to transact in a cheaper way: India is the largest receiver of remittances. People can save a lot of money spent on conversion, processing charges, etc.
• Promoting the culture of digital extortion: India became victim to ransomware attacks like Wannacry and the ransom was collected in crypto. India is one of the biggest potential victims of cyber scams.
• Greater divide in society: India has one of the highest digital inequalities. Those who are not able to afford technology are devoid of such digital currency thereby ensuring that the inequality continues.

Conclusion:

Like all technology, cryptocurrency exchanges are neither inherently good nor bad. To make use of the revolutionary potential of the underlying technology behind cryptocurrency, while avoiding its negative consequences, a proper regulatory framework is required. Individuals, companies and governments who move quickly will be the ones to benefit most and will perhaps have the biggest role in shaping this new digital reality.

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