Digital Money: The Law of Cryptocurrency and Cryptography

Abstract

Ordinarily, a cryptocurrency is a digital currency. Crypto currencies are digital assets that are designed to effect electronic payments without the participation of a central authority or intermediary such as a Central Bank or licensed financial institution. It is a medium of exchange that is in the form of digital asset and is designed to use strong cryptography in securing financial transactions; the control of creating additional units; and verifying asset transfer. Put more simply, it is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority. Cryptocurrencies’ may have an effect of bypassing the traditional established centralized systems of money transaction control and this factor has to some minor extent contributed to the skepticism that some economies have towards adopting this trend. In the making of Bit coins, the framers envisioned a world here people would use this digital currency for almost all transactions. No wander still, that the traditional banking system wants to control or eliminate bitcoin. Despite the skepticism surrounding Bitcoins, some countries have endorsed it. El Salvador was the first country to use bitcoin as legal tender, alongside the US dollar.1 Japan and the U.K have also gone miles in promoting the using of bitcoins. Bitcoins being virtual and secured by cryptography, gives another important bypass to common day challenges in the money market like counterfeiting and double spending. They fall under a decentralized system based on block chain technology.