In the field of the monetary news a non – traditional currency named, Bitcoin is a new development. The hottest coin among the coins are Bitcoin, a Program created by Satoshi Nakamoto, and named the new currency as bitcoin. This system excludes the agent, terminate interest fees, and make clear transaction to mitigate fraud and cut levies.
It devolved the entire institution, comprising government, banks of overlooking the bitcoin transactions.
This virtual or crypto currency is a technology the price of which is fixed by the share market and approves them to purchase and trade goods and services by exchange of the digital Information. The 16 long alpha-numerals of security code encrypted with distinct symbols allows the goods and services purchased or sold. There are approx. total 2.1 crore Bitcoins. This is due to the fact that the mathematical problem has this number of solutions. It mounts into the idea of making alert as that of real money.
The crypto currency is traded via a cast peer-to peer network that encompasses worldwide. All transactions are stored and published publically and these transactions are irreversible, that is once the transaction is performed or done it cannot be withdrawn. The concept of decentralization vetoes the organizations and group of people to control the currency and transactions. The Transactions are verified by different people in the network simultaneously and is called bitcoin mining.
The transactions by bitcoin are not linked to real world bodies. Bitcoins are received on addresses that are random generated chains of about 30 characters. This is the hastiest transactions around the globe that can be traced but not to the real world entities. No one can trace the Physical location of buyer and seller in the case of Bitcoin Transaction. Confirmed in some minutes these Bitcoins are secured cryptographically. In the absence of gatekeeper, a software that is freely available for Installations to receive and send bitcoins. Hence, it is an absolutely decentralized system.
These mathematical symbols generate Bitcoin that works on the block chains where all the confirmed transactions are stored in so- called Blocks. Each transaction creates a unique block, which is validated by peer-to-peer computer network of users. So it prevents the stealing and double spending of the same currency.
Bitcoins are statistically and accurately created by the computers in the network performing difficult number encrypting task which is called Bitcoin Mining. Bitcoin Mining are done with expert computers. Bitcoin Mining is the quill of the Bitcoin Network. It provides security and gives confirmation to the Bitcoin Transactions. It must be noted that in the absence of Bitcoin Miners, there is danger of attack on the network, which threatens its accurate functionality.
The role of miners is to shield the network and to confirm every Bitcoin transaction.
Miners complete this arduous task by solving a computational problem which allows them to chain together blocks of transactions, called Block Chains. In return to their service, miners are rewarded with newly-created Bitcoins and a transaction fee. Miners receive 12.5 bitcoins as well as the fees paid by the users sending transactions for authorizing each transaction. These transactions are stored publicly in the block chain, which upturns by every future transaction.
For the transaction Bitcoin Wallet is necessitated, it is a digital Wallet. It is a very important step in the process of acquiring Bitcoins, Bitcoins are the digital cash, it is equivalent to a physical Wallet, it stored a lot of relevant information like the secure private key used to access bitcoin addresses and carry out transaction. There are four kinds of wallet are desktop, mobile, web and hardware. Web allows to use Bitcoins from anywhere, on any browser or mobile. The selection of web wallet must be done cautiously since it is the storage of sequestered key online. This key can be used to transfer and receive the bitcoins from and the other people in the network. A Bitcoin address is created, which is used to receive the bitcoins from the network or to pay goods and services.
To Protect the client address is paramount in being safe with bitcoin transaction. As Bitcoin is an open form of transaction, anybody in the network setup can view your transactions and balances of transactions. That’s why it is advisable to frequently change the client bitcoin address with each Transaction so as to protect the address.
Now if we discuss the trump of Bitcoin, It is quite safe and swift transactions around the globe with no central agency or gatekeeper required to grant permission to transfer the fund thereby having no monopoly in the decision making of this crypto-currency. In this way, it is extremely democratizing the financial market by handing over the power to common people. However, as they say it is a double edged sword. One of the biggest concerns is that once the funds are transferred through bitcoin it cannot be reversed. The system can trace the flow of the funds/transaction but cannot revert it as there is no connection between the digital and real world entities. That is an enormous risk.
Another major cause of worry is the anonymity associated with the bitcoin. This particular loophole has been exploited by the terrorist organizations to finance terror activities, drug mafia for drugs trade, money laundering and other nefarious activities. Owing to this there has been increasing interference from the governmental agencies to monitor bitcoin. However, this strikes at the base of model of anonymity and decentralization. The idea of crypto-currency is worth pursuing. We have to find a balance maintaining both the privacy as well as the abuse of the anonymity offered by the bitcoin system. In short, this is the most challenging part of the problem to give autonomy and still have some check-and-balances in the system.
For the crypto –enthusiast in India, The Central Bank says entities regulated by Reserve Bank of India will not be dealing with cryptocurrencies immediately due to the risk it possesses. The Finance Minister, Arun Jaitely had made a statement regarding speculation that Bitcoin was banned in India. His exact words were: “The government does not recognize cryptocurrency as a legal tender or coin.”
(By Dr. Sonam Dixit. Views expressed are personal)