What is Bitcoin (cryptocurrency)?

Bitcoin is a crypto-currency or software that forms a decentralized, peer-to-peer, world-wide payment system, without the control of any centralised authority.The blockchain software resides on thousands of computers, all over the world and is maintained by a mix of ordinary people and more sophisticated computer experts, collectively known as ‘miners’. Bitcoins are transferred via a peer-to-peer network between individuals, with no middleman bank to take a slice.

The unit of account in this system is ‘Bitcoin’. A ‘Satoshi’ (named after its creator) is the smallest amount within bitcoin, representing 0.00000001 bitcoin, i.e. divisible down to 8 decimal points.

The bitcoin network runs on a software system called ‘blockchain’. The blockchain software can be used to store and send anything of value, so there are companies using it to store documents like property deeds, etc. Blockchain as a technology is becoming popular among banks and other big financial institutions, who want to use it to settle payments on their back-end systems.

Bitcoin can be converted into ordinary currency based on its value on that date, or even used to make purchases from sellers that accept bitcoin.

The bitcoin blockchain by itself is very secure, but the bitcoins can be stolen from an account by stealing log-on and password info, i.e. ‘private key’ of the account holder and the bitcoin can be sent to another account controlled by the thief. Once bitcoin is transferred, it can’t be recovered.

At present, most investors are not really using it like a currency to make payments, but instead, are using it as a speculative investment, with the hope to turn it into profit in the future. As on date, ‘bitcoin’ has not been accepted as a legal tender in India. Japan and Australia have officially accepted bitcoin as a legal currency.

Bitcoin is being considered as a genuine innovation that will be around for a long time and help transform money.

Positive Implications Of Rise Of This Crypto-Currency:

• Governments across the world have already stepped in, to regulate trading in bitcoin, so that it can become a more established part of the financial system. Hence, it will actually legitimize the currency and broaden its adoption for investors.

• Some financial experts see the recent surge in bitcoin market as a bubble that may burst. But because the bitcoin market cap is very small, even if it crashed, it would not have a significant impact on the broader financial markets.

• In the recent weeks it has been seen that the global stock market rally has slowed down, but bitcoin has continued to surge higher, which is luring more and more investors to invest in this market.

• Slowly bitcoin as a currency is catching on among some retailers, mostly e-commerce: US companies like, Overstock accepts bitcoin, as does Microsoft’s Xbox store, and PayPal and Square allow merchants to accept bitcoin.

• The retailers might even encourage customers to pay in bitcoin in future if it costs them less in transaction fees than credit cards do.

Negative Implications

• Sincebitcoin transfers cannot be traced, bitcoin is often used to purchase drugs or stolen goods or finance other types of criminal activity.

• It can become a major source for terror funding across the globe.

• It is believed that 40% of the bitcoin are owned by just 1000 people and hence, powerful people or ‘whales’ could collude to influence the price of bitcoin.

• Moreover, since there are relatively few buyers and sellers of bitcoin, this market is likely to remain volatile and the ‘whales’ could easily push the price around.

• There is a risk that the demand of bitcoin may go down sending its price plummeting. It can happen because of any unforeseen circumstances like, technical problem, regulatory interference, bad publicity arising from the massive amount of electrical power needed to mine for bitcoin, etc.

• Bitcoin offers both anonymity and the security of an electronic transaction. Hence, bitcoin can become a sub-economy where people could hide their income and evade government taxes.

• Bitcoin is not as liquid as other investments, firstly because settlement can take more than a week, and secondly, amid panic selling, some bitcoin holders might be unable to sell for a fairly long time, resulting in steep losses.

Conclusion

Bitcoin as a crypto-currency is gaining huge popularity. In fact, on 03 March 2017, the price of a bitcoin had surpassed the market value of an ounce of gold for the first time as its price surged to an all-time high of $1,268.

However, big banks, brokers and financial institutions have warned that bitcoin currency should not be ushered in hurriedly without adequate transparency, regulatory mechanism and risk assessment.

Bitcoin users predict 94% of all bitcoins will have been released by 2024. As the total number creeps toward the 21 million mark, many suspect the profits miners once made creating new blocks will become so low they'll become negligible. But with more bitcoins in circulation, people also expect transaction fees to rise, possibly making up the difference.

Thanks You
For reading
This is Vaibhav Pal
a freind near me asked about me what bittoine is when i told him you came to you with a good friend in the other day and asked him what is the brother cryptocurrency.

after that i can not explain that less brother than you,you will go and read my blog and send it to you.

so friend,i have written this blog for you.
let me like you.
tell your freinds to tell your family your neigbours and continuie supportthem.