Bitcoin is a technological tour de force – Bill Gates
What is bitcoin?
Bitcoin is digital form of currency just like dollars, rupees etc. and held electronically. These aren’t printed like general currency. There is no physical entity which can be called Bitcoin. This is a type of crypto currency. What makes it different from the normal currency is the fact that it is decentralized means just like internet nobody owns bitcoins. So it puts people at ease who finds the banking system hectic and complex. Thus bit coin can be called a virtual currency.
Satoshi Nakamoto proposed bitcoin, which is based on a mathematical algorithm. The mathematical formula is available to everyone so that everyone can check it. Moreover bitcoin software is open source software so that everyone can check its credibility.
If currency is there, why should one use BITCOIN :-
- This is fast. A bank takes minimum 2-3 days to clear a cheque, meanwhile that bank holds the money. But Bitcoin is far faster than our banking transaction.
- Transaction fees are very low as compared to banks. In some cases it is absolutely free. This saves a handful amount of money.
- This is safe, no one can steal your information, unlike credit cards which uses all your personal information like CVV, credit card number, expiry date). Bitcoin transaction does not require to give any personal information. They use two keys: public and private key. When user sends a bitcoin, he/she signs a transaction by joining both public and private keys together and then applying a mathematical function to them. This creates a certificate that the transaction same from a particular user not from any fraud.
- It does hike inflation. Whenever a government does not have enough dollars to pay off the national debt, its federal reserve can simply print more money and inject that money into system .Thereby increasing inflation. But bitcoins were designed to have a maximum number of coins. Only 21 million bitcoins will ever be created. So, there won’t be a problem regarding inflation.
How it works:-
Bitcoins are sent through bitcoin wallets and user has to digitally sign it by providing keys before sending it due to security purpose.
Suppose A sends some bitcoins to B, that transaction will take place like this:-
There will be an input of bitcoins. This is a record of from where did A get the Bitcoin at the first place.
Record of the amount B got.
An important point to be noted here is these both transaction records (from where A got bitcoins, from where B got) will be written in a public ledger, which will be accessible for everyone in that community.
Bitcoins in INDIA:-
A notice was issued by the Reserve Bank of India (RBI) in June, 2013, acknowledging that virtual currencies posed operational, regulatory, and legal challenges.
But many experts believe that bitcoins can be used as an alternative currency in near future. Bitcoins sure do have a future. The only question is how much time are they actually going to take to become mainstream.
