What is Bitcoin?
Bitcoin is basically a form of digital currency or a crypto-currency that can be created and help electronically which was started by the company called Coin-base. It came into the digital world in 2008. It was introduced by Satoshi Nakamoto. These are not printed like dollars, euros or like other currencies. It is also named as ‘peer to peer, electronic payment system’. Bitcoins are regulated by an algorithm and it limits the supply.
Bitcoins over Normal Currency
Bitcoins are different from normal currency is the reason that it can be used to buy and sell things electronically. Bitcoin is different from conventional money because the records would be decentralized. No large bank has any control of it, nor governments, nor banks and neither Nakamoto. The innovation at Bitcoin’s core known as the block chain fascinates both academicians and entrepreneurs. This block chain is used in serving the official online ledger of every Bitcoin transaction from back to the beginning.
How does a Bitcoin work?
Bitcoin transactions are transacted through electronic Bitcoin wallets. They are digitally designed for security purpose. For sending Bitcoin, you need a Bitcoin address and a private key. To understand practically here is the Bitcoin Game.
- Suppose A (John) sends some Bitcoins to B(Peter), both use pseudonyms to keep their identities secret.
- Digital copies of the transaction are passed to miners for the verification process.
- The miners are the individuals or groups running the Bitcoins software on a worldwide network of independent computers.
- They complete turning the latest transactions into a block. Roughly every ten minutes, one of them succeeds.
- The first miner to solve the problem is rewarded with Bitcoins, and the block is added to the block chain.
- Block chain is an online ledger that records every Bitcoins transaction ever made. A copy of it is kept by each miner and it is used as proof of ownership for all the Bitcoins. With the tremendous increase in internet surfing and the transactions digitally, digital currency came into demand which was incapable of being avoided.
Best Bitcoin exchanges in the world
The US started regulating Bitcoins but it has no inclination of regulating in India. Though Bitcoins are listed on the stock exchange and presently the largest exchanges are
- BTC China
- Mt.Gox in Japan
- BitBox in U.S
- Bitstamp in Slovenia and
- Bitcurex in Poland
Till now, our country doesn’t have any centralized Bitcoins exchange, but people can buy and sell coins through various websites. India has users around 23,000 who are using Bitcoins wallet where their digital currency is stored. There are also 14.6 million Bitcoins units in circulation and have a market value around US $3.4 billion.
Red Flag raised by RBI
RBI had raised a Red Flag against Bitcoins. They say virtual currencies in digital form are stored in digital/electronic media called as e-wallets. Therefore, they may face losses from getting hacked, losing the password, comprising with credentials, malware attack, etc. Transactions are taking place without any authorized central registry or agency, so we might lose e-wallets which result in taking away all the virtual currencies held in them. But the value of Bitcoin is still having a matter of concern and seems to be a matter of speculation.
Japan declares Bitcoin a Legal Currency
Japan has recently debated on how to handle Bitcoins whether it should be taxed or not. Tsukasa Akimoto, a member of the liberal Democratic Party –the ruling party of Japan put forth a question to Finance Minister Taro Aso, asking: “Can’t you consider not imposing a consumption tax on Bitcoins in line with the international trend?”
Defending to it, he responded by saying “Japan is not alone in taxing Bitcoins”. He pointed to countries including Australia who put a tax on virtual currencies like Bitcoin. The whole discussion happened on February 5, 2015. However, there is a strong disapproval regarding taxing the crypto-currency and other virtual currencies.
Thus, the digital currency has caused a many hurdles for law enforcement. Now entrepreneurs and academics are finding it difficult to build a better version.