The term “Crypto Currency” is one of the latest and widely used economic terms in contemporary times. But its origin dates back to prehistoric periods. Using tokens in B2C and B2B trade is neither unusual nor new. Since ancient times, this practice has been in use when the small communities did not have regulated currencies and organized modes of payments.
In that scenario, communities & traders had developed their own systems of payment for buying & selling goods. The most common methods were two – one the barter trade, and the other tokens.
Even today, most of us must have obtained plastic tokens at the counters in restaurants, snacks shops and fast food kiosks before getting the dish. This is something that nearly resembles cryptocurrency while doing online shopping.
The emergence of Crypto Currencies
With the advancement in technology and the emergence of online shopping, these physical plastic & metallic tokens have been transformed into e-Tokens or Virtual Tokens. And so these are also called virtual currency, e-currency and crypto currency. To date, none of these currencies are available in physical form. These are generated and exchanged on computers with specially designed software.
The first digital currency, “Bitcoin” was brought into existence in 2009. By now, more than 200 such currencies are available on the crypto-coin market and are used worldwide. These include:
- Bitcoin Cash
- Wrapped Bitcoin
- Ethereum Classic
- Benance Coin
- Bitcoin SV
- USD Coin
- Shiba Inu
- Binance USD
Benefits of Digital Currency
As compared to State-regulated currencies, a digital currency has its own uses. These currencies have but are not limited to the following benefits.
Unless allowed and accepted by other countries, all the official currencies are valid only in the issuing country. If required to be used in any other country, they need to be converted into local currency. Any e-currency can be obtained and used anywhere, anytime.
No Restrictions on Holding & Using Crypto Currency
Except in only 3 or 4 countries where their use is illegal, all virtual currencies can be held and used freely. Prominent countries where virtual currencies are not allowed include China & Saudi Arabia. The only issue is, states do not recognize them. But they have not banned their use. Irrespective of the fact that the Govts. do not recognize these virtual currencies, they allow their citizens to use virtual currencies for online purchases and investments.
All the virtual currencies are decentralized. They are not regulated by any Central Bank or Govt. Regulator. Investors or users are required to follow the terms & conditions of the Company that manages the virtual currency. The common condition is a restriction on use against illegal trade like drugs.
All virtual currencies can be acquired online freely by investment in local currency. For example, if you need Bitcoin or Dogecoin, or any other virtual currency, you won’t need to get your local currency converted to any other currency. Just pay online in your own currency and get virtual currency equal in amount.
Virtual currencies are global currencies and are accepted by businesses across countries for B2B and B2C shopping and holding for investment. Among the prominent online stores & businesses that accept e-currencies is Shopify.
Payment By Credit Cards
Many well-reputed global banks allow using their credit cards for investments in virtual currencies. In India, the Reserve Bank has withdrawn its earlier restrictions imposed on the Banks against using their credit cards to acquire virtual currencies.
Traded Like Other Currencies
Most of the e-currencies are traded on their own trading platforms. These are traded in the same manner as other global currencies, stocks & commodities are traded on stock exchanges.
These currencies are highly volatile. Like stocks, they too undergo heavy fluctuations from a shoot-up to the peak to a nosedive fall to the basement.
Investors should stay active and keep a vigil on their trends.