Bitcoin has been the trending topic in the financial market. The value of the Bitcoin has been increasing day by day, Japanese claim that this is legal currency and where as other countries believe it is as a Fraud business.Before analysing, let me enlighten you with the topic.
Bitcoin is a virtual currency or cryptocurrency that works on a peer-to-peer basis which was invented in 2009 by SATOSHI NAKAMOTOand the identity is anonymous till date. There are many other coins invented after bitcoin like Litecoin, Peercoin, Feather coin and Ethereumetc .These are called as Altcoins or Alternative coins.
Bitcoins has no central authority controlling it. Like currency notes, it can be sent from one person to another in the form of transaction and allows to save money in the Bitcoin Wallet. But the whole process continues without the permission of central bank or the government. This system completely depends on cryptography to control the creation of the currency. While no authority controls the generation of the coins or tracks them, the system itself is designed in such a way that the network maintains a complete data of transaction history of each user record of every transaction as well as tracking issuance of the currency.
Bitcoin actually works on blockchain. Blockchain is a ledger ,which stores all the transactions of bitcoin. In the blockchain, a copy of the ledger file is shared between thousands of participants globally, also called miners. Even you can become a miner by simply downloading the open source bitcoin software. New bitcoin transactions are added in the blockchain by a consensus of a majority of the miners. People do mining because they receive new created bitcoins in return for their efforts. Once a transaction is entered in the blockchain, it can never be erased or modified.
Many large companies are accepting bitcoins as a legitimate source of funds. They allow their online products to be bought with bitcoins. With the extreme facilitation of transfer and earning of bitcoins, it would be a mistake not to accept these new-found online coins as cash. With a fluctuating value, the funds can either help or hurt the company. Companies like Wikipedia , Microsoft ,Wordpress.com and many more are accepting this digital currency as a payment.
Recently, bitcoin future began trading on 10th of Dec as the increasingly popular virtual currency made its debut on a major US exchange.Another large futures exchange, the Chicago Mercantile Exchange, will start trading its own futures on 18 December but will use a composite of several bitcoin prices across a handful of exchanges.A debate is raging on the merits of such currencies. Some say they serve merely to facilitate money laundering and illicit, anonymous payments. Others say they can be helpful methods of payment, such as in crisis situations where national currencies have collapsed.
By Moqtar Ali