Knowledge Series: What is Bitcoin and Why is it Popular in India?September 26, 2017
Bitcoin, like most of you, would be aware is a form of digital currency, it is electronically created. One will not find Bitcoins printed anywhere, they are produced by people who use complex algorithms called mining Bitcoin. Bitcoin is a cryptocurrency, and what sets it apart or adds to its popularity is that it is decentralised. Which translates into the fact that no one owns it, in other words, large banks cannot control people’s money.
The group, or person who created Bitcoin, gave themselves the alias ‘Satoshi Nakamoto’. Basically, it was created virtually to allow transactions between people who might not know each other, and people who wanted negative interference from governments and central banks.
So every coin created and its custodian can be identified by using a combination of Private-Public keys. The public key which everyone on the transaction knows identifies the coin, however, it is only the owner who knows the private key and hence can identify themselves. Bitcoins are held in digital wallets, there are many free wallets available on the internet.
What is interesting is the fact that every transaction from its origin, which means every coin from the instant of generation, is recorded in an open ledger called the Blockchain. And this ledger is regularly updated, can be checked and downloaded by anybody.
When a new transaction is made, you can use the Blockchain to check,
- And verify that the coin exists
- And that the coin is not being used by any other transaction simultaneously
Although no RBI or federal reserve guarantee the validity of the coin, it relies on the only peer to peer network.
Hence all this makes Blockchain and cryptocurrency, Bitcoin an incredible concept which is in recent times being used for multiple purposes. Although people for a long time were and still are sceptical of the process, due to the comfort of tech-savvy people accepting Bitcoin, the popularity has increased.
Bitcoin has become very popular in India; it is estimated that over 2500 Indians trade in Bitcoins on a daily basis. The popularity has increased especially after the decision of demonetisation.
Bitcoin is gaining popularity in India mainly because-
- Privacy Factors, the transaction in Bitcoin can happen without sharing the details of senders and receivers, there is no need of sharing the bank account details, which is required in other transactions. Bitcoin eliminates the need for using a debit or credit card.
- Borderless Transactions, Bitcoin is open to all, it does not create borders and anyone, from any corner of the world with access to the internet can get connected to the Bitcoin Network.
- Decentralised Transactions, it is a two-way interaction between the sender and the receiver. No traders are required, also the online transactions of Bitcoin are majorly free from fraudulent activities, as reverse transactions are not allowed.
- Minimal Transaction Fees, what you pay for international transfers over Bitcoin is minuscule as compared to other available options.
- Fast Transactions, Bitcoin transfers are almost immediate as there is no third party involvement and the Bitcoin network processes the payment.
It is debated that a central authority needs to be created for regulation purposes, Bitcoin currently is enjoying growing popularity not only in India but across the globe. And on the onset, it looks like this cryptocurrency is here to stay with more people taking an interest in this form of currency and joining the network.