In the history of money, humans have witnessed a variety of methods to trade and payment of goods and services like fiat, coinage, paper, digital, etc. In the current scenario, most of the Indians are juggling between the banned and newly issued currency after the decision of Indian Prime Minister Narendra Modi to withdraw the circulation 500 and 1000 rupee note to eliminate the corruption and the use of black money in the country. Due to which the existence of Bitcoin has gained popularity and getting extended coverage. So what is Bitcoin? How Bitcoin is related to currency news? Bitcoin was produced to eliminate the disadvantages related to traditional currencies while trading. Bitcoin is a new form ofÃ‚Â Ã‚Â currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto (software developer), where no middle men or bank is included in the transaction. It is a form of digital currency, created and held electronically only and hence is the 1st example of an expanding category of money: crypto-currency. Transaction via Bitcoin does not require any transaction fees or your real name. With the help of Bitcoin one change exchange value without any involvement of a 3rd party and hence enhances security and settlement time with no restrictions. No single person or any authority controls it and also is not printed like other currencies- Rupees, Dollars, etc. Bitcoin is produced by lots of people simultaneously running computers all around the world with the help of specialized software that solves mathematical problems. It was introduced on 31st October 2008 to a cryptography mailing list and was released as open-source software in 2009.
How is Bitcoin different from other currency?
- Bitcoin is independent of any central authority and be transferable instantly, with as low transaction fees as possible.
- Bitcoin is not physically printed by a central authority or a bank.
- Bitcoin has its own rules making it unanswerable to the general populace.
- Bitcoin is open to anybody.
- Production of Bitcoin is done by utilizing the computers in a distributed network that is known as Bitcoin mining.
- Bitcoin has its own network.
- The software code is also open source so anybody can verify that it is doing what it is supposed to.
- A Bitcoin can be divided into smaller portions with the smallest amount being one hundred millionth of a Bitcoin and known as a Satoshi, named after the creator of Bitcoin.
- Fewer paperworkformalities and hassle free.
- A user can have multiple Bitcoin addresses.
- International transfers are not chargeable in Bitcoin.
- Bitcoin is not bound to an institution or country.
- Bitcoins can be exchanged for other currencies, products, and services.
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- It is decentralized
- It is easy to set up
- It is anonymous: Users can hold multiple Bitcoin addresses and they are not linked to names.
- It is completely transparent: Bitcoin stores details of every transaction happened in the network in a huge version of a general ledger called the Blockchain.
- It is fast: You can make payment from anywhere and it will arrive minutes.
- IT is non-refundable: Once the payment is made you cannot get your money back unless the recipient returns it to you.
Nonprofit organizations like The Electronic Frontier Foundation, Greenpeace, The Mozilla Foundation, and The Wikimedia Foundation have accepted their payments in Bitcoin and as of 2015 number of merchants accepting Bitcoin exceeded to 100,000. In late 2013, University of Nicosia became the 1st university in the world to accept Bitcoins. Also, some US political candidates like Jeff Kurzonaccepted donations for his campaign in Bitcoin. As of December 2014, following merchants have accepted payment in Bitcoin:
- Dish Network
- Time Inc.
- Virgin Galactic
- Dynamite Entertainment
- Clearly Canadian
- Sacramento Kings
Limitation of Bitcoin mining:
As per the protocol of Bitcoin it has been decided that there will be only 21 million Bitcoins ever. The more it is produced the harder it is to create new ones as like gold Bitcoin is also governed by principles that cannot be changed. A documentary film called The Rise and Rise of Bitcoin was also made in late 2014 featuring the interviews with people who use Bitcoin.
Is Bitcoin legal in India? At present, there are no regulations governing virtual currencies like Bitcoins in India. Reserve Bank of India (RBI) has also cautioned virtual currency traders and users to various security related risks like hacking, malware attack, etc. As of now RBI has not legalized Bitcoins in India and has declared it as unauthorized. ON 28th December 2013, the Deputy Governor of the RBI, K.C. Chakrabarty has made a statement that RBI had no plans to regulate Bitcoin.