What is Bitcoin?

Bitcoin (₿) is a cryptocurrency. It is a decentralized digital currency without a central bank or single
administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for
intermediaries, rendering it immune to government interference or manipulation.
Transactions are verified by network nodes through cryptography, a method of converting data into
complicated codes which are tough to crack. Each Bitcoin behaves like a computer file which is stored in a
‘digital wallet’ app on a smartphone or computer.
All transactions are recorded in a public list called the blockchain. Bitcoins can be sent to other digital
wallets and thereby can be exchanged for other currencies, products, and services. Bitcoin can also be
used as an investment. Bitcoins are created as a reward for a process known as mining.
A Brief History
Bitcoin was invented on 18 August 2008 when The domain name "bitcoin.org" was registered by an
unknown person or group of people using the name Satoshi Nakamoto. On 31 October 2008, a link to a
paper titled Bitcoin: A Peer-to-Peer Electronic Cash System [4] was posted to a cryptography mailing
list. Nakamoto implemented the bitcoin software as open-source code and released it in January 2009. On
3 January 2009, the bitcoin network was created when Nakamoto mined the first block of the chain, known
as the genesis block.
Bitcoin has been criticized for its use in illegal transactions, its high electricity consumption, price volatility,
thefts from exchanges, and by economists.

Bitcoin in India

At the moment, RBI has banned the transaction of bitcoins in India. Hence, one cannot use the
cryptocurrency for the payments of goods and services and there is no protection available to those using,
trading or dealing in them.

Impacts on the Economy

Bitcoin is a potential way to improve the basic financial services and the quality of life of the people in
developing nations. People in India generally reach out to inexpensive mobile banking services for their
financial needs. With the adoption of Bitcoin, this can be further supplemented.

Enabling users to purchase virtual and real goods and services with virtual currency in some platforms may
reduce the demands on real money. Users will no longer depend on real money to buy what they require.
This also eliminates exchange rates across the world. On the other hand, some platforms enable users to
exchange their virtual currency with real currency and this will increase the demands on real world currency.

To bring security and enable scrutiny, central banks and financial institutions maintain a record of all the
transactions undertaken by the people. This economic power is now shifting to the masses and can be
challenged thereby leading to the politicization of money.

Job growth is among the major benefits. Bitcoin can contribute to good business, boost the overall IT
industry of India, and add new jobs for the young generation. Technology start-ups favor dealing with bitcoin
while setting up as it can be integrated into almost any software build that can be monetized.

It can act as an alternative to gold for the purpose of investment. This lessens the demand for
gold, ultimately bringing down imports.

People can make illegal transactions anonymously on the dark web, where you can find assassins,
weapons and other illegal items. There have been implications that Bitcoins can be used to secretly launder
money outside the country.
Conclusion

The Indian economy is experiencing a severe economic slowdown not seen in many years, and legalizing
a cryptocurrency such as bitcoin can potentially help. Just like trading in shares, trading in Bitcoins is
massive and seeing the rise in traction around cryptocurrencies it is likely to grow further. Bitcoin’s current
price hike shows that it has a very bright future ahead.