Bitcoin is a digital form of currency in the global money system . It enables people to send or receive money across the web. It is not necessary that the two or more person involved in the exchange know each other. The basis for Bitcoin's security is the mathematical field of cryptography. Therefore, it also popularly known as Crypto-currency.
It is not backed by any country’s government or central bank. Bitcoins can be traded for goods or services similar to cash but virtually with vendors that accept the cryptocurrency as mode of payment. Verification and monitoring of money transfer between individuals is done by P2P network.
MECHANISM OF BITCOIN
The Bitcoins are stored as computer files in a digital wallet either on computer or mobile phone. People can exchange these computer files orientated Bitcoins amongst themselves to facilitate transactions. Each and every transaction is accounted in a public list known as Blockchain.
USE OF BITCOIN
Bitcoin is a worldwide payment system. It is the first of its kind decentralized digital currency since the system works without a central bank or administrator. The transactions take place between users directly without middlemen through direct peer to peer interaction.
LEGITIMACY OF BITCOINS
The Central Banks of various countries prohibits banks, currency exchanges, financial companies, and payment service companies from dealing in bitcoins or other digital currencies. Although there is a lot of risks associated with bitcoins as they are not legal tender, they are still accepted by businesses and merchants.
Day by day, Bitcoin is going to gain popularity and might even replace official currencies.
Bitcoins can be of great help to a lot of people. Since it is an international currency, one can use them in any country without having to convert between currencies. The Blockchain is really secure and it lets one make sure one’s money is exchanged to the respective person.
Being an emerging mode of payment, there are a lot of disadvantages of Bitcoin which will be further rectified through use.
- By Bhavya Bhatia
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