New Wave of Currency – ‘Bitcoins in India’
Bitcoin may be new word for Indians but the concept was introduced in 2009 by Satoshi Nakamoto. It is based on open source platform. Bitcoin is basically a digital currency and P2P payment network. United States, Europe, China and Japan are the major markets for Bitcoin. All transactions through Bitcoins are maintained by a Decentralised Network which also verifies the transactions. Currently Bitcoin market is comparably small due to its use by speculators. As the Bitcoin future is seems to be large because the transaction fees are lower than any other cash alternative processors.
Now let us understand how this new concept maintains integrity and authenticity of Transactions -
Basically there is no actual exchange of currency while using Bitcoin by Buyers and Sellers. Buyers just have to update to a public transaction log known as Blockchain. Blockchain records the ownership of bitcoin and keeps all transactions record to prevent double spending. Cryptography (in which a user generates a pair of cryptographic keys: one public and one private) is used to protect the integrity of the blockchain. And only private key can decode the transaction. All transactions in blockchain is maintained by using a distributed network of computers that does the payment processing work of Bitcoin.
To do a transaction or sending bitcoins or anyone voluntarily can create Wallets. Wallets are basically the bitcoins addresses and to send bitcoins these bitcoin public addresses are needed. And Private keys must be entered to send the bitcoins. Securing and protecting the private key is the essence of wallet security.
This digital wallet concept is encouraging many entrepreneurs, venture capitalists to start thinking or remapping their investment in this new currency business. Many experts in India is also viewing Bitcoin as a new-age currency. Currently only few business establishments are accepting Bitcoins in India as right now, people are little bit skeptical about its authenticity and use. Microsoft Ventures Accelerator is the one who is taking initiative by lending its office space for India’s Tech Capital, first Bitcoin meetup in 2014.
On the parallel road, India banking supreme RBI(Reserve Bank of India) is also watching and learning on bitcoins usage and the associated risks. However, currently RBI is not in mood to allow digital currency as there are "significant financial and security risks". They also said "There is no underlying or backing of any asset for virtual currencies. As such, their value seems to be a matter of speculation...No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities”. And on the same side they also examining the issues associated with the usage, holding and trading of virtual currencies.
But experts on techs is viewing bitcoin’s popularity as a fan currency and will make million users each month.
By - CA Balram Bansal