Bitcoin – The trending virtual currency

Bitcoin, often described as crypto or virtual currency, is a type of currency that is completely virtual. It functions as an online version of cash, allowing users to buy services and products. However, it is important to note that bitcoin is not recognised as a legal tender in India and several other countries. The Indian government is still working on to establish a robust policy to regulate the use of bitcoin.

Each bitcoin is basically a computer file stored in a digital wallet application on your devices. People can send and receive bitcoins, and every transaction is recorded in a public list called the Blockchain. This feature enables the tracing of bitcoin history, preventing unauthorised spending and the creation of counterfeit coins or reversing transactions.

There are three primary methods to obtain bitcoins, but it is crucial to note that all of these methods are illegal in India. The first method is to acquire bitcoins by using real money. The second method involves selling goods or services and accepting payment in bitcoins. The third method, which is highly complex and technical, involves creating bitcoins through a process called mining. Mining requires specialised and powerful computers, designed to handle extremely complex and difficult calculations. However, the difficulty of these calculations is continually increasing to prevent excessive bitcoin generation. If one were to start mining now, it could take years to obtain a single bitcoin, and the cost of electricity for the computer could exceed the value of the bitcoin itself.

Bitcoins hold value because people are willing to exchange them for real goods, services, and even cash. Now the final question is ‘Is it secure?’ However, it is worth noting that the value of bitcoin has experienced fluctuations since its inception in 2009. This volatility has led some individuals to question the safety of converting money into bitcoin.

Regarding security, every bitcoin transaction is recorded publicly, making it exceedingly difficult to duplicate bitcoins, create counterfeit coins, or spend coins that one does not possess. Nevertheless, it is possible to lose access to one’s bitcoin wallet or accidentally delete bitcoins, resulting in their permanent loss.

While the future of bitcoin remains uncertain, it appears that it is here to stay and may soon be legalised in India and other countries.