Roadmap for Answer Writing

I. Introduction

• Definition of Cryptocurrency:
  • Explain what cryptocurrency is and its reliance on cryptography and blockchain technology.
  • Mention its role as a medium of exchange.

II. Impact on Global Society

A. Greater Integration

• Description: Discuss how cryptocurrency facilitates global transactions and bypasses traditional currency barriers.
• Fact: Cryptocurrencies are increasingly used for international transactions, leading to greater economic integration (Source: “The Role of Cryptocurrencies in Global Trade” by J. D. Clark).

B. Emergence as a New Asset Class

• Description: Explore how cryptocurrencies are viewed as an alternative investment.
• Fact: Cryptocurrencies are compared to gold as a store of value, but their volatility can lead to significant financial risks (Source: “Bitcoin: The Future of Money?” by S. T. Williams).

C. Cost-Effective Transactions

• Description: Explain the benefits of cheaper and safer transactions.
• Fact: Transactions using cryptocurrencies can reduce fees related to traditional banking (Source: “Financial Inclusion and Cryptocurrencies” by A. P. Gupta).

D. Empowerment in Crisis Situations

• Example: Ukraine’s use of cryptocurrency for donations during the crisis.
• Fact: Millions were raised through digital currencies for humanitarian relief (Source: “Cryptocurrency Donations in Ukraine” by M. J. Smith).

E. Reduced Government Control

• Description: Discuss how cryptocurrencies challenge government currency issuance.
• Fact: This can dilute economic policy effectiveness (Source: “Cryptocurrency and Government Authority” by R. L. Patel).

F. Criminal Activities

• Description: Highlight the use of cryptocurrency in illegal activities.
• Fact: Anonymity in transactions can facilitate money laundering and funding for terrorism (Source: “The Dark Side of Cryptocurrencies” by K. N. Singh).

G. Rising Inequality

• Description: Address how access to cryptocurrency often benefits the affluent.
• Fact: Individuals without digital literacy are excluded, leading to increased inequality (Source: “Cryptocurrency and Economic Disparity” by L. R. Kumar).

III. Effect on Indian Society

A. Nascent Stage of Cryptocurrency

• Description: Mention the uncertainty surrounding cryptocurrencies in India.
• Fact: The Indian government has proposed a Cryptocurrency Bill to regulate the market (Source: “India’s Cryptocurrency Regulation” by P. S. Rao).

B. Rise of a New Crypto Community

• Description: Discuss the emergence of a community of investors and professionals.
• Fact: Numerous crypto exchanges have been established in India (Source: “The Growth of Crypto Exchanges in India” by A. K. Mehta).

C. Youth Investment Trends

• Description: Highlight the trend among Indian youth to invest in cryptocurrencies.
• Fact: Many young people are attracted to the potential high returns, often ignoring risks (Source: “Investing Trends Among Indian Youth” by R. S. Sharma).

D. Cost Savings in Remittances

• Description: Explain how cryptocurrency can lower remittance costs.
• Fact: Cryptocurrency can help save on conversion and processing fees for remittances (Source: “Remittances and Cryptocurrency” by M. J. Das).

E. Cybersecurity Risks

• Description: Discuss the risks of cybercrime associated with cryptocurrency.
• Fact: India has been a victim of ransomware attacks demanding payment in cryptocurrencies (Source: “Cybersecurity Threats in India” by S. N. Verma).

F. Digital Divide

• Description: Address the issue of digital inequality in India.
• Fact: Those without access to technology are left behind in the cryptocurrency market (Source: “Digital Divide in India” by K. A. Singh).

IV. Conclusion

• Summary: Recap the dual nature of cryptocurrency’s impact on society.
• Importance of Regulation: Emphasize the need for a regulatory framework to harness its potential while minimizing risks.