BUSINESS
- Resham
C
rypto currencies have been
in the news lately because
tax authorities believe they
may be utilized to launder money
and evade taxes. What’s Crypto
currency? Crypto currency, as the
name suggests, uses encrypted
codes to perform a transaction.
These codes are recognized by
other computers from the user
community. The buyer account is
debited and the seller account is
credited with such currency.
How are Transactions Made on
Crypto currency?
When a transaction is initiated by a
single user, the computer sends out
public code or public key that
interacts with private cypher text of
individual receiving currency.
Special users called Miners can link
the extra code to the publicly shared
block publicly resolving a crypto-
graphic puzzle and gain more
crypto currency in the process. Once
a miner confirms a transaction, the
record from the block can’t be
changed or deleted. The transaction
is as easy to scan a QR code in the
application on your smart phone or
bring them face to face by using
Near Field Communication.
Note that this is very comparable to
regular online wallets like PayTM or
MobiQuick. Die-hard users swear
by BitCoin because of its decentral-
ized nature, international approval,
anonymity, the permanence of
transactions and information protec-
tion. Unlike paper
currency, no Central Bank controls
crypto currency. Transaction logs are
stored in a Peer to Peer network
which means every computer chip in
its computing power and copies of
databases are stored on every such
node in the network.
How Can Crypto currency be utilized
for Money Laundering?
The very fact that there’s No control
over crypto currency transactions by
Central Banks or taxation authorities
implies that transactions can’t always
be tagged to a certain individual.
Which implies that we do not know if
the transactor has obtained the store
of value legally or not.