What is your reaction when you get to know that you can purchase or can make payment for something online without any banking system . Yes it is possible now by Crypto currency or Digital Currency like Bit coin. In April 2017, the total market cap for all cryptocurrencies, combined, was slightly higher than $25 Bn. The same market cap shot up by 300% and touched $100 Bn within 60 days.
Japan has regularized bitcoins in April 2017 for any transaction .They has amend their Banking laws that brought bitcoin exchanges under anti-money laundering/know-your-customer rules, while also categorizing bitcoin as a kind of prepaid payment instrument.
Indian Govt is also working on it. The Department of Economic Affairs in the Ministry of Finance in India has formed an inter-disciplinary committee to examine the framework on virtual currencies. The reports of that committee is expected very soon.
Does it means that after demonetization an alternative method of financial transaction would be the next revolution in financial Market. People will get an alternative from conventional Banking System for making transactions.And if this happen how it could be more safe and widely accepted?However After demonetization the number of Bit coins users is growing rapidly in India. As of now there is around 600000 bit coins users in India. It attract majority of young investors and traders.
By considering all these facts RBI has issued warning message to all that investors taking bitcoins on their own risk till it is not regulated.Despite this their are numbers of exchanges and wallet start-ups are trading in India for bitcoins like zebpay and Unicoin .These Indian Startups are getting angel funding from investors also .This shows that investors has positive outlook towards Indian cryptocurrencies market. Unocoin raised $1.5 million USD, a record for an Indian digital currency outfit, and is paving the way for domestic and international investors to support Indian Bitcoin companies. Another bitcoin company Zebpay raised $1 million USD in 2016, largely from Claris Life Sciences and Jindal Worldwide.
In fact Bitcoin or cryptocurrencies is very new concept in India. There is a lack of awareness about pros and cons of Bitcoins.Pepole are skeptical whether it is just like any ponzi scheme or is their any financial viability .to make it understand you should know the basics of cryptocurrency.
Digital Assets and Blockchain Foundation India (DABFI). The self-regulated entity is working towards educating the masses about cryptocurrencies and propagating best industry practices for businesses. Rashmit Gupta, whose company SearchTrade is a founding member of DABFI, says that it aims “to create more confidence among the public to use Bitcoin, and eventually increase the use of digital tokens more effectively.”
Just take a quick insight about Cryptocurrencies .
What is cryptocurrency?
Cryptocurrency is a Digital currency which has no physical existence. Neither you touch it nor you see it but it exist only in virtual formats. You can use it as a means of exchange with various trader and online transaction.
Cryptocurrency is an encrypted decentralized digital currency transferred between peers and confirmed in a public ledger via a process known as mining.The Main part is that this currency is not regulated or controlled by any authority in the world .You will never know who is the originator of this coins and who has possession of it and how much.
This all seems to be very tricky and you must thinking that How it can be possible that millions of people using this coins as method of exchange or trading and nobody knows from where it is regulated and controlled.
Let us simplify it.
Cryptocurrency has been invented by some software professionals in 2008 as an alternate method of exchange without involvement of any Bank or third party with an advantage of not revealing the identity .All this possible by computer algorithm called Blockchain.
Block chain is a computer program me which has various nodes to register every transaction of virtual currency and no duplicity or error is possible in this registration process . A block chain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks Therefore as far as speed and accuracy is concerned Block chain is very reliable and accurate that is why trading of virtual currency is so dynamic and flourishing in all over the world.
What is Bitcoin and How it comes in existence.
“Bitcoin is one of the most important inventions in all of human history.
For the first time ever, anyone can send or receive any amount of money with anyone else, anywhere on the planet, conveniently and without restriction.
It’s the dawn of a better, more free world.”
— Roger Ver, CEO Bitcoin.com
Bitcoin is first cryptocurrency which has been invented by one or group of computer programmer named as Satoshi Takamito and released in 2008 as an open source software.Till now it is Growing with an accelerated path.Today value of a Bitcoin is approx RS 160000 .
- It is mostly used cryptocurrency in the world since its invention in 2008 .
- You can transfer bitcoins to any part of the world without any banking system and charges are also very nominal.
- No authority can seize or block your fund as it is in Digital Format
- Nobody can track you through your transaction unless you not disclose your ID .
- Total supply of Bitcoins is limited to 21 million therefore its value is keep growing.
- As per research report of Cambridge university in 2017 there are 2.9 to 5.8 million users are active worldwide who are using cryptocurrency .
How these transaction Happen.
As cryptocurrency is a Digital or virtual currency it has been traded or exchanged through wallet. Just like you are using Pay tm Wallet for transaction bit coins or any other virtual currency can be exchanged or transfer through Digital Wallet.Every user should have a registered wallet and all kind of trading or exchanging could be done through this wallet only. There are various wallet all over the world in India there are some wallet like Zebpay and Unicoin are working in India which is providing option for exchange and Trading of Bitcoins.All transactions has been added to a Public ledger which is based on blockchain method.It works as a public ledger and record each transaction accurately.The process of adding each transaction to public ledger is called Mining.All these process is based on computer language called cryptography which is a complex computing process.
Risk Involved with bitcion or cryptocurrency-
Limited acceptability- So far very limited number of merchants started accepting Bitcoins it will take time for widely acceptance .
- Wallet could be lost – Nobody can do anything if your wallet would lost due to virus attack or hacking.If you lost your wallet once it could not be recovered .Lack of security is major concern.You cannot claim anywhere.
- Fluctuation in Pricing– Bitcoins price are very volatile.It goes up and down as per the trade volume .For example if you buy a shirt today on certain bitcoin price but if you would go to return it after a week the price of bitcoin would something else.Now the problem is that what amount the merchant would return as there is no standard benchmark currency to rate the amount of bitcoin this type of confusion are always arising while purchasing with bitcoins.
- It may cause Deflation – Total number of Bitcoin is limited to 21 Million.This may cause deflation.Actually bitcoins system provides advantage to early adapters. By each passing days price of coins is rising but when and where to spend is very unpredictable. At some point of time it will affect with diflation.
Apart from above mentioned limitation there are some other reason which count as disadvantages of Bitcoins or cryptocurrencies.like No physical existence,No minimum valuation guaranteed and possibility of unknown technical flaws.
In nutshell Bitcoins or cryptocurrency are a new method of exchanges and transactions.It Provide us a flexibility and independence of trade and exchanges fastly and globally.But on the other hand their is some potential threats always.If you would like to enter into this Keep all these things in mind.There is still a lot to explore in this world of virtual currencies.It is still in the exploration era.
Team –Digital Sandesh