When Daadi Decided To Use Cryptocurrency
You thought you’d seen an entirely new age when Daadi started using a smartphone. Then she started telling YOU what to watch and what not to on Netflix. (Daadi, Game of Thrones was not as sanskaari as Mahabharat but it was still really good okay) And then, she began using cryptocurrency. This is how she broke it down:
Cryptocurrency, as defined by Daadi
“Let’s say you actually listen to me for once and go to the sabjiwaala to get 2 kilos of potatoes. In another time, you could pay him by trading him with a basket you made. Today, you’d offer him the coins and paper money we get from the bank or the government. They’re two different kinds of mediums of exchange.
Cryptocurrency is another medium of exchange. It’s digital, so you can’t physically hand the sabjiwaala something, but that currency can be accessed from anywhere. Paying him in cryptocurrency is different from paying him through GooglePay because that still uses money that’s recognised by the government. Cryptocurrency on the other hand, are entirely different systems of exchange that are made by individuals and different groups.*”
Why cryptocurrency is safe
“It might look like your grandfather’s handing out monopoly money on the internet and that you can make it yourself later on. The thing is, it’s made using cryptography, which makes counterfeiting difficult. There are a lot of crypto techniques such as public-private key pairs and hashing functions that they use to record where each crypto coin or token is going.”
How everyone has power over cryptocurrency
“Whenever you go to the library - okay no, whenever I go to the library - when I borrow a book, the library notes down my name and I give them my card, right? There's an entire record the library has about who's borrowed the book, which keeps it safe.
Now let's say I’m tired of depending on the library. What if I wanted to exchange books directly with people? To make sure they don’t hoard it and call it their own book, I could write it down just like the library. When that book needs to go on to someone else, they’d write it down in the same record book. And we could make this record book public so that everyone in the neighbourhood knows who’s got what book at what time, and where all it’s been.
Cryptocurrency works like that. It’s not owned or manipulated by a central authority like the library or the bank. It’s decentralised and transferred directly between two people. Using a technology called blockchain, cryptocurrency allows everyone to see transaction information. Since the information is added block by block in a long list, it’s called blockchain. Once you enter information, it can’t be changed or deleted. Double checking that a transaction has actually taken place is done by people/software called miners, by solving algorithms. When they manage to solve the algorithm and verify the process, they also get money - so it’s quite like mining. ”
Where you hold your cryptocurrency
“To mark a cryptocoin as your own, you don’t need to hide it in your blouse or store it directly in your digital wallet. The coin’s existence and ownership details are in the blockchain itself. You just need to prove your ownership with your cryptocurrency wallet. That will have your private key which allows you to access the coins you own.
It’s like a giant floating Godrej bureau on the internet that has everyone’s crypto coins in separate lockers. Each drawer has the two keyholes, one that’s public and another that’s private. The private key is used by the owner to give the coin to someone else when they want to. The public key is used in part of the verification process to check that it was in fact transferred by the owner.”
“There are more advantages to cryptocurrency. For starters, it’s universal. You don’t need to worry about converting it to another currency to send it to someone sitting in another country. It’s also easily divisible and you can get the smallest of small amounts. That means I can make the storekeeper pay me in crypto change instead of giving me some toffee I can’t eat with my diabetes. At the same time, you can transfer really large amounts without high transaction fees, unlike when you go through a bank.
You’re probably already getting evil ideas - and yes, there have been hacks and mafia using this kind of thing. However, since cryptocurrency also does not have stable values all the time and transactions can easily be traced back to the real source, it’s not ideal for them to use either. Plus, more regulations being put into place as countries around the world have begun to realise the power of crypto.”
So put in one big defining sentence, cryptocurrency is a digital medium of exchange that’s decentralised, universal and runs on blockchain. Now you might think Daadi’s just super struck by how funky it all sounds, even if peers her age aren’t too enthused by the subject. But there’s no escaping the market potential of it - in 2020, Crebaco Global Inc. calculated India’s crypto market potential to be at around 12.9 billion dollars. Even the OTT market (Netflix, Hotstar etc) is expected to reach just 5 billion dollars by 2025. Although the country only recently lifted the ban on crypto trading and the future looks uncertain, if it’s regulated well, that means more growth in the industry. The globally renowned Binance Group already set up a 50 million dollar blockchain technology fund for India after the ban was lifted. What people call the blockchain revolution will start soon, and Daadi might just start selling her ladoos in Bitcoin.
*This is how it all started out, but governments today are all set out to make their own cryptocurrency as well.