The Digital World Of Cryptocurrency
ALL ABOUT BITCOIN
What is bitcoin? How does it work? Is it legal in India? How much authenticity does it possess? This article is going to give you a clear cut notion and information about cryptocurrencies and its most circulated form i.e., Bitcoin.
To start from the basics, bitcoin is a digital form of money which can be traded and transacted only online. Cryptocurrency is mainly a digitalised form of currency which is not available in the form of hard cash but in the form of a soft one. Right now bitcoin is treated as the biggest entity of cryptocurrencies which gives you a broader platform for doing the transaction. Though the genesis of bitcoin is still a myth, it is believed that it was created by a giant developer named Satoshi Nakamoto in 2009. He invented the software which he eventually left it to other developers of the world in 2010. The bitcoin community has since grown exponentially.
Bitcoin is an open network of monetary transaction and creation. The most fascinating quality about it is that it cannot be controlled by anyone. There is no authority to control or regulate the system of bitcoin instead of any developer around the world can review the code and make their own modified version of the Bitcoin software. Because of it open-source nature, many government or person in authority believes that it is not safe and it can be misused. But analyst has declared it unharmful and believed that it is the most advanced and genuine form of digital transaction which cannot be tamper or meddle with.
Many people believe that it is a very fair means of a transaction which is transparent o everyone and at the same time no one can interfere or create any mishap.
The second interesting thing is that no one has the power to control Bitcoin. The reason being nobody has that much of share of Bitcoin. One can only control or manipulate the semantics of Bitcoin if he/ she has at least over 50% of the Bitcoin network. But as of today, the highest control percentage of Bitcoin network is 16% and its experts say that given the velocity at which Bitcoin is growing it is very unlike of someone to ever take control of it. So the beauty of Bitcoin is that they are produced and created by people and no government, no banks have the power to control it, only people.
Slowly as the economic conditions of many countries, especially third world countries are getting worse and for some parts worst, Bitcoin is becoming safe money for a lot of people around the world. The more uncertainty takes place in other parts of the world the greater will be the value of the Bitcoin as a source of stability in the market.
Legality of Bitcoin in terms of India:
Though it is legal in many parts of the world, in India it is not legal in terms of the transaction. Hereby illegal we only meant that bitcoin cannot be used as legal tender to buy commodities or services. However, you can still purchase it as a form of an asset just like gold and eventually trade it with anybody. So the question about whether Bitcoin is legal in India or not is that it is legal but not in terms of the transaction rather in terms of trade. In more clear words we can say that if you are buying or trading Bitcoin and in future, you bear any loss because of it then the Govt. of India is not going to take responsibility of it and it will not help you in any case even if you lose all your money. There is no legal safeguard available for people trading in Cryptocurrencies either. #DoItOnYourRisk
Government Concern Over the Use of Bitcoin
The Indian government is mainly concerned about its legitimacy. For them, the biggest issue is that it does not have any statutory status and it can not be controlled. Not the government, not the RBI and even judiciary have no power to dominate or to even to guide or oversee it. They are afraid of the transparent nature of Bitcoin and its growth, at which its value is increasing in the market. Because of its non-controlling nature of it, the govt has many disputes for this regard. They are sceptical about the effect which it is going to have on our economy in the long term
Secondly: The myth of Bitcoin to make you rich overnight. For some who don’t really know about Bitcoin for them it portrait as something which is capable of earning fortunes overnight. And irrational people who are greedy enough to make money anyhow fall for it and end up losing all their money.
The government fears that Bitcoin can create a way for black money or maybe it can become an avenue like Swiss Bank where hoarders can dump the money illegitimate sources. Given that govt recently dealt with demonetisation and still bearing the after effects, it would certainly not want to see all its money going back into that black hole.
Lastly, cryptocurrencies are big threat to national security according to the Indian Government as there are rumours that it is being used in underworld to fund terrorism and given the recent turmoil of India dealing with terrorism, the concern is obvious and genuine and it clearly believes that the absence of any sort of control and watch on State can make it really difficult to keep a check on its use in anti-national activities.
In layman’s terms, Bitcoin is nothing but just a regular online application in your mobile phones or ipads or desktop where you create an account and you have been provided with a personal Bitcoin Wallet that allows you to purchase and transact the Bitcoin money. It enables the user to send and receive money via the internet.
But the inside working of Bitcoin is more complex and calculated. Bitcoin networks maintain a record of every transaction in the form of ledger called “block chain”. This also allows a user’s computer to verify the validity of every transaction takes place in the Bitcoin network. The user has been authorised the transaction through a digital signature corresponding to the sending addresses, which allow him to have full control over sending Bitcoins from their own Bitcoin addresses.
Nowadays, Bitcoin has been used by more and more people as well as enterprises like restaurant, online services etc.
One can acquire/ create by four basic way:
Payment mode of Bitcoin:
Bitcoin payments are actually easier to make than debit or credit card and can be received without any outside authority control. Mining: Mining is the way to mint more Bitcoins in the market. It is a very important part of the Bitcoin network. The individual who deals with this is called miners. They have access to powerful computers where they solve a complex algorithm in order to mint or produce new Bitcoins. But there is a limit on the increasing numbers of Bitcoins. The total number of Bitcoin units that can ever be created is 21 million. With each addition of block chain the number and circulation of bitcoin increases.
PROS OF BITCOIN
Every transaction taken place in Bitcoin is available for every bitcoin user to see. The Bitcoin ledger by the developers who solve complex algorithm in order to make the transaction secure and safe. This is called block chain and all the finalised transaction is transparent for everyone, however, the personal information is not disclosed.
Bitcoin transactions are easy and cheap. There are no additional charges by merchant or users while sending or receiving Bitcoin. Also, Bitcoin transactions are irreversible which means that it cannot be charged back unlike banks where the sender has the ability to reverse or chargeback the payment while accepting credit card payments.
Bitcoin provides complete privacy to its users in the transaction and this is the main reason that the authorities hate for its potential to allow the private and anonymous transaction. Though every transaction between the users is monitored and it is clear for every bitcoin user to see but the identity is not shared in its ledger. Which adds to its advantage that you don’t need any ID proof or passport or any kind of identification to send or receive Bitcoin. In short, we can say that there is no hindrance of paperwork and it protects against identity theft.
One of the very distinctive traits of Bitcoin is that it has been abiding from any authority interference. There is no set of management behind the cryptocurrency market. One principal that Bitcoin developers propel on is to abide by any governmental body or authority to dictate and regulate Bitcoin. Bitcoin allows the user to have complete control of their transaction which helps in keeping the Bitcoin network safe.
CONS OF BITCOIN
Bitcoin business is very new in the market which creates the question on its credibility and reliability. As we already know that Bitcoin was invented in the year 2009 so it’s basically only 10 years old which makes it pretty difficult to build trust in individuals. In can, we rely on it. we need to see its performance and return on investment.
Transparency work both ways in bitcoin benefits and disadvantages. People might use it of illicit work and they can be used in funding or trading illegal activities. Because nobody regulates its networking, and there is no identification proof of an individual therefore no can ever say about authentication of a person’s identity. Hence, bad people might use it for their own affairs and this can put a threat to the society.
As for third world countries like India where we have just started to acknowledge the digitalisation we are still lacking in accepting and adopting the digital world and its application. So for those who are still sceptical about the going online, Bitcoin is a little drawback because it’s a digital form of currency which only operates online. Therefore, one can always be dubious about its existence and purchasing power or its working. So for them, it is somehow difficult to understand the concept of Bitcoin or cryptocurrencies.
Bitcoin is still in its early stage of development and it needs a lot of rebounding and grooming in order to achieve a progressive growth. The development of Bitcoin is under construction so one needs to look very clearly and deeply before investing in Bitcoin.
So far no complaints have been found registered regarding the transaction and network of Bitcoin. Its feature of transparency enables smooth transaction of money to everyone, and people are adopting more and more of it every day. In this way, we can say that bitcoins are proliferating, earning the trust of many whiles on the other way we cannot overlook the consequences it might bring in future because, from Government perspective, Bitcoin effect may be disastrous in the long term. Individuals are using it as a getaway from doing illegal business, and people may be involved in funding the money to the corrupt organisation. If we are thinking more broadly than we have to admit that Bitcoin is still developing, they have yet to prove the significance of it and therefore, the Govt. concerns are legit, and one can certainly not ignore the possibility of a danger it can possess