What is Bitcoin?
Bitcoin is a form of cryptocurrency in which transaction takes place digitally. It is also termed as “Digital Gold” owing to its high value. As per Wikipedia Page, “Bitcoin is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank”.
One of the biggest reasons, behind the massive popularity of bitcoins, is the “anonymity” associated with it. Apart from this, it is not limited to any taxation law in any of the countries. Unlike other forms of digital credit transfer, it is hassle-free and extremely quick. From the viewpoint of investors, it offers a high return on investment. Early investors in bitcoins have made huge profits, with some even turning millionaires overnight.
What makes it unique?
1.Decentralized mode of credit transfer
It is not controlled and monitored by any central authority. It involves data mining by machines operating for it, with no financial body regulating it.
- Easy to set up
Unlike the banks, whether National or International; it simply does not undergo the setup process as it is setup within few seconds. There are no questions asked, and with no fees payable.
- Its completely anonymous
Bitcoin users can hold multiple bitcoin addresses, and they are not linked to their personal information. This is one of the unique factors, behind the immense popularity of Bitcoin.
- Transparency in credit transfer
It stores details of every single transaction. It is governed by a technology called “blockchain technology”. As per Investopedia, “a blockchain is a public ledger of all cryptocurrency transactions that have ever been executed. The blockchain has complete information about the addresses and their balances right from the genesis block to the most recently completed block”.
- No transaction fees during transfer
Unlike banks or even online money transfer services there are no transaction fees involved in it.
- Agile technique of credit transfer
As the credit transfer takes place within few seconds, it is an extremely agile technology of credit transfer.
7.It is non-repudiable
When your bitcoins are transferred from the sender to the recipient, there is no process of getting them quickly without the discretion of the receiver. No authority can compel the receiver to do so, even legally.
Security agencies around the world are facing a huge challenge due to encryption technology involved in Bitcoin transfer. Smugglers and drug-lords around Mexico and Brazil, have used it extensively for illegal transfer of fund. It was used by the hackers to extract money in the form of Bitcoin, during the recent Ransomware attack which impacted milllions of users around the world. Microsoft founder, Bill Gates in his Annual Letter wrote extensively about the drawback of anonymity involved in Bitcoin Technology.
Financial Analysts around the world have emphasized on the tremendous scope of Block Chain technology, with most of them believing with slight regulation Blockchain can be an alternative form of digital currency.