Cryptocurrency, a digital medium of exchange, like US dollar and other physical currencies, is fast gaining traction across the globe. Despite the fluctuations, the cryptocurrency market has grown phenomenally.
In India, this market has grown from $923 million in April 2020 to $6.6 billion in May 2021, according to Chainalysis, a blockchain data platform. Among 154 nations, India ranks 11th in cryptocurrency adoption, it said.
Bitcoin was one of the earliest cryptocurrency, which was lapped up by investors. Since then, many new platforms have emerged, which are mostly powered by blockchain technology.
What is blockchain?
A blockchain is a database that is shared across a network of computers. In fact, it is the technology that enables the existence of cryptocurrency.
Blockchain uses strong encryption techniques to keep a check on the creation of monetary units and verify the transfer of funds. Once a record has been added to the chain, it is very difficult to change. To ensure all the copies of the database are the same, the network makes constant checks.
Blockchain has been used to underpin cyber-currencies like bitcoin, but many other possible uses are emerging.
It is believed to be the fastest growing blockchain network in the world of cryptocurrency. Solana has a block time of 400 milliseconds and transaction fees of less than $0.01.
Its token – a virtual denomination of a cryptocurrency – is SOL. It has jumped to the seventh spot among the world’s top 10 largest virtual coins amid optimism that the blockchain could be a long term competitor to Ethereum.
Solana’s SOL token has tripled in about three weeks and now has a market value of more than $41 billion, according to CoinGecko.
The coronavirus pandemic has sparked huge interest in shared virtual environments, or the “metaverse”. First coined in science fiction, the term is a combination of the prefix “meta”, meaning beyond, and “universe”.
It refers to shared virtual worlds where land, buildings, avatars and even names can be bought and sold, often using cryptocurrency. In these environments, people can wander around with friends, visit buildings, buy goods and services, and attend events.
The term covers a wide variety of virtual realities, from workplace tools to games and community platforms.
It is a cryptocurrency exchange which claims to be the largest in the world in terms of daily trading volume of cryptocurrencies. According to its website, Binance was founded in 2017 and is registered in the Cayman Islands.
Binance is in trouble as Singapore’s central bank recently said that it should stop offering payment services. The Monetary Authority of Singapore warned last week that Binance’s website could be breaking the law by providing payment services to Singapore residents without an appropriate licence.
After the blow, the exchange has said that it will it will restrict its services in Singapore from September 10.
Binance entered India in 2019.
India and cryptocurrency
Several digital currency exchanges are eyeing India to launch trading platform to capture the growing domestic crypto market. However, the fate of cryptocurrency in India is still unclear.
The government was set to present a bill to parliament by March that proposed a ban on cryptocurrencies, making trading and holding them illegal. But the bill was not tabled in the session and there is uncertainty about the government’s plans.
The Reserve Bank of India (RBI) recently said it is planning to launch its own digital currency by December.