Tuesday, May 20, 2014

Bitcoin: Is it the Currency of Future???

Bitcoin, a new digital currency created in 2009 by an unknown person is an electronic currency also known as ‘crypto currency’. The transactions made with no middle men, i.e. no banks, make it distinctive. As there are no transaction fees or any other such formalities, it has gained huge popularity across the globe. Nowadays, more and more merchants have started accepting them. It symbolizes the beginning of era of cashless transactions and point toward a future where currencies may take digital form some day or the other. 

Bitcoins are a form of digital public money, whose value is derived from the computational solution of cryptographic problems. The transactions are recorded and secured as a public-private key cryptography on a decentralized peer to peer client network by millions of computer users called 'miners'. Nowadays, one bitcoin is currently worth 600 US dollars (approx.). Also, the world has bitcoins worth 1.9 billion USD at present and approximately 2 billion USD more have to be created in the future. Check out the various reasons how bitcoin currency has converged to make a real media sensation.

1) Bitcoins are neither produced by any central bank nor are they regulated by any government.  So, it is much clear that there is
no banks ‘log-in’ for your money transaction and hence, government tax agencies and the police are unable to track your money.  Due to the lack of government oversight, bitcoins have emerged out as an important tool for contraband trade and money laundering. A number of wealthy criminals started buying bitcoins in large volumes. This also caused their value of to touch the all new heights in the last 18 months.

2) Bitcoins are affecting the storage methods of the personal wealth greatly.  The initiation of printed money handed over the power of currency to a central province and diverse banks across the globe. Printing, storage, movement, etc. of the virtual money is carried out by such banks and they charge the users for their varying services.  Bitcoins makes a difference; they are designed to hand over the control of personal wealth back to the individual users. They hold actual packages of complex data that have a value in them, not like the paper balances that just promises to have a value.

3) Bitcoin irreversible transactions: Each one of us is aware of the conventional payment methods, for example bank drafts, cheques, credit and debit card charges, or online transfers. All these services serve the benefit of being insured and also they are reversible.  But, this is not the case with bitcoins. The transaction pursued every time with bitcoins change wallets and the result is final or irreversible. In short, there is no insurance protection of the bitcoin wallet. Once the wallets hard drive data or the wallet password is lost, the complete wallet's contents are lost forever.

Undoubtedly, bitcoin is quite resourceful and elegant, but it also contains some sort of basic flaws that makes it dubious for the world to accept it presently!

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