Following are the challenges faced by India in implementing blockchain technologies:
The Indian government does not want to legalize something that cannot be regulated. Hence a bill called “The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021” is being proposed.
The bill intends to have the Reserve Bank of India create an official digital currency and outlaw all other private cryptocurrencies in India. This will create a sense of lack of trust among investors, particularly retail investors, and as the government introduces a new currency, investments will be further reduced.
Although investment can be made in this instance by opening overseas accounts where Cryptocurrency is permitted, the number of investors who will do so will be few.
Because bitcoin is created through an energy-intensive mining process, it has a variety of environmental consequences.
The figures are astounding:
- The amount of energy needed by Bitcoin is equal to Argentina’s total energy consumption.
- It produces a staggering 11.5 kilotons of e-waste per year.
- Cryptocurrency alone, according to studies, may boost global temperatures by 2 degrees Celsius in less than three decades.
Blockchain technology, which makes cryptocurrencies technically secure, is its most important USP. However, there are several issues:
Is it quick: Currently, it focuses primarily on transaction security and speed compared to other digital transactions such as VISA, which processes 24000 transactions per second compared to Bitcoin, which processes 3 to 7 transactions per second.
Is it entirely safe: Spoofing, payment gateway hacking, crypto theft, and crypto-jacking have all been reported. Crypto theft is when hackers access your account and transfer your Cryptocurrency to their own. On the other hand, Crypto-jacking exploits another person’s CPU to secretly mine cryptos without their permission. Processing power is significant in mining for a variety of reasons.