Prelims Perspective: What needs to be learned 

• How cryptocurrency is different from regular currency.
• Pros and Cons

Mains Perspective: Notes need to be prepared

• IT and Communication (GS III – Science and Technology)

What needs to be known?

• Cryptocurrency
  • What is it?: Cryptocurrency refers to digital or virtual currencies secured by cryptography, operating on decentralized networks like blockchain without central authority control.
  • Types
    • Bitcoin (BTC): The first and most well-known cryptocurrency.
    • Ethereum (ETH): A platform that allows for building decentralized applications (dApps).
    • Tether (USDT): A stablecoin pegged to the value of the US dollar.
  • Pros
    • Enables borderless, low-cost transactions without intermediaries like banks, ideal for remittances and underserved regions.
    • Provides financial inclusion for unbanked populations via mobile wallets and peer-to-peer transfers.
    • Promotes transparency through immutable public ledgers, reducing fraud in verifiable transactions.
  • Cons
    • Extreme price volatility discourages stable use as a medium of exchange or store of value.
    • High energy consumption in proof-of-work mining contributes to environmental concerns.

Source: The Hindu