Bitcoin: The Emerging Currency
In the digital era, where almost everything around us is automated and the business processes are carried out electronically, even the area of currency has been digitalised and made in the form of electronic money.
The Bitcoin, launched in 2009, is a form of electronic cash which allows online payments to be sent directly from one party to another without going through a financial institution (a bank or clearing house). Bitcoin hit the market as a creation by a pseudonymous developer named Satoshi Nakamoto. Bitcoins have become the first decentralised currency where you can send coins through the internet. The bitcoins can be used to buy a variety of goods and services and can even be exchanged for other currencies.
For a user to buy and sell bitcoins, he would need a digital wallet. The transaction is secured with the network nodes by individuals called miners, who process the payment and record in the public ledger, also known as block chain, and are rewarded with transaction fees and newly generated bitcoins. Apart from that, bitcoin is also traded via online exchanges.
The bitcoin has gained immense popularity with more than 12 million bitcoin wallets being used for paying with this digital currency in 2015 and the amount of money in bitcoin is estimated at $6.8 billion. But most of the central banks don’t encourage the use of bitcoins. With regard to the Indian perspective, the Reserve Bank of India doesn’t permit bitcoin transactions, as it violates the Foreign Exchange Management Act (FEMA) and can be used to move black money easily. But on the other hand, investors feel secured with the digital currency, consider it as owning an investment and don’t want banks controlling their money. Bitcoin has the potential to change the society similarly to how the Internet has done.
