What is Bitcoin?
Bitcoin is the largest cryptocurrency also known as virtual/digital currency which was invented in 2008 but was released in the year 2009 as open-source software. This cryptocurrency uses peer-to-peer technology for the transactions. Unlike other paper money which is under the control of the central bank or any monetary authorities, Bitcoin is a decentralised cryptocurrency which is not owned or controlled by any central bank or single administrator. It functions independently and therefore this digital currency can be sent from user to user without involving intermediaries. The transactions are recorded in “blockchain” which is a form of ledger system. Blockchain can be termed as a collection of blocks where each block is considered as collection of transactions.Blockchain helps to keep a track of ownership and enables efficient transfer of Bitcoin.
Though it was introduced in 2009 in the month of January it witnessed a very high raise in the price in the year 2017 in the month of November. It is a type of investment that attracts the investors with its increasing value. Bitcoins act as a reward for the mining process. As it is globally accepted it can be exchanged for other currencies. It facilitates instant and quick payments and also charges lower transaction fee than other online alternatives. Bitcoin tokens are balanced using public key and private key. In order to receive funds public key ( cryptographic code) is used. Incase of signing transactions to spend the funds and to ensure the security private key is used.
Santhoshi Nakamoto under this name a person or group of people came up with the open-source software with a motive to create a currency system that could work without the involvement of third-party such as banks and shall operate using blockchain (decentralised ledger). But the founder of Bitcoin is still a mystery. Bitcoin is the world’s largest cryptocurrency. Bitcoin exchange is a place where people buy and sell Bitcoin.
Bitcoin is also criticised for illegal transactions and fraud. Two years ago in 2018 the government of India and RBI had issued warnings against dealing in cryptocurrencies which also included Bitcoin. But it seems like things are changing now. ‘Economic Times’ has mentioned in its columns that “Two years ago after top banks stopped dealing with cryptocurrency exchanges and their customers on the central bank’s direction, the two sides are now back in business , according to four people with direct knowledge of the matter.Top banks including SBI,HDFC Bank, Yes Bank, and ICICI Bank have started allowing, customers to use bank accounts on cryptocurrency trading platforms, they said”. It also mentioned that these top banks are trying to reach out to cryptocurrency exchanges and offer them several facilities.