Topic : Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
5) “Though cryptocurrency often has been viewed as a disrupter to the traditional notions of currency, it might outlast national currencies as a concept.” Critically analyse.(250 words)
Why this question:
The article provides for a detailed analysis of how cryptocurrencies though have been doubted for long by various countries, it is gaining significance as a currency that can challenge the traditional ones.
Demand of the question:
Answer must discuss in detail the nuances of cryptocurrency. One must trace its evolution from being doubted to the one now that has been gaining significance for known and unknown factors.
Critically analyze – When asked to analyze, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgement.
Structure of the answer:
Start with definition of cryptocurrency.
Discuss the following points in detail:
- What are cryptocurrencies? How are they used?
- Explain how though widely seen as a disruption for the traditional banking and financial institutions, cryptocurrencies have gained significant traction over the last half a decade, at the same time creating a regulatory nightmare for banking regulators across the globe. At present, there are around 969 cryptocurrencies in existence across the globe, with a total market capitalization close to 116 Billion USD.
- Quote reasons for their popularity.
- What are the associated pros and cons?
- What needs to be done?
Conclude with significance and way forward.