Bitcoin is the currency of the internet. It enables instant payments to anyone, anywhere in the world. Unlike traditional currencies such as Dollars, Bitcoin are issued and managed without any central authority. It is designed around the idea of using cryptography to control the creation and transfer of money.
The supply of Bitcoins is regulated by software and the agreement of users of the system and cannot be manipulated by any government, bank, organization or individual. The limited inflation of Bitcoin system’s money supply is distributed evenly to minors who help secure the network.
Bitcoin is a digital currency one can use for personal transactions or business at high speed and low cost. It is designed for global commerce in the modern age, with the ease of a credit card but without the high fees. Bitcoin can be used at the same value anywhere in the world where Bitcoins are authorized, thus becoming the first truly global currency. The nature of Bitcoin means that compared to credit cards or other financial tools, one’s identity is safer from theft.
Bitcoins are sent easily through the Internet. It is fast as funds received are available for spending within minutes. It costs very little, especially compared to other payment networks. It will prove beneficial as involvement of paper currency is less. Moreover, it’s changing the course of history. As the Indian market is to be in sync and has to compete with the International market along with its exceptions.
However, Bitcoins is also very complicated as it’s not tangible and thus increases the risk of illegal trading. On this note, Reserve Bank of India (RBI) governor, Raghuram Rajan on February 13 expressed concern over the regulation of digital currency, Bitcoin. He further cautioned users for using Bitcoin as a means of exchange. However, he declined to share details of RBI’s future course of action on Bitcoin. As stated in RBI’s official document,’ RBI cautions users of virtual currencies against risks’, it says,” The creation, trading or usage of virtual currencies including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. As such they may pose several risks to their users.” (www.rbi.org.in).
Raghuram Rajan is worrying a little on the currency’s stability and whether it will retain the same value in future as it has today. However, he did not say that there is no future of these virtual currencies but said, it’s in a process of evolution. He only expressed concern over the unseen, unknown centres maintaining the value of currency.
Despite Raghuram Rajan’s caution to the investors, Bitcoin traders have not given up. Last month, Highkart became the first and the only e-commerce site in India to start accepting payment in Bitcoin. Highkart sold a pair of shoes from Provogue in exchange for Bitcoin as its first transaction.
One of the challenges facing growth of Bitcoin could be that many are still hoarding the currency and not trading them. There is nothing illegal in accepting Bitcoin, except that, the RBI will take more time to come up with clarity. However, Highkart and other Bitcoin traders in India said they are following all banking regulations prescribed by the RBI leaving no room for any illegal activities.
Once in process, Bitcoin is going to affect people of all strata from investors, bankers, stock and foreign exchange to common users. So, on this, Saurabh Deshmukh, a Chartered Acoountant based in Pune says,” It’s an innovative concept and like social networking, it will gain wider acceptance gradually. However, since it operates through code, if it gets deleted by mistake, one tends to lose the entire hardwork in one go.”
Thus, with Bitcoin, you can be your own bank! Bitocin was named the best technology Achievement of 2013 at the Crunchies industry award on February 13.