Home Banking Awareness What is Bitcoin? and How Bitcoin can affect Indian economy?

What is Bitcoin? and How Bitcoin can affect Indian economy?


What is Bitcoin?

What is Bitcoin?

What is Bitcoin?

  • Bitcoin is one of the famous forms of crypto currency or we can say a Virtual Currency.
  • Bitcoin works without a central bank or central single administrator.
  • It was created by an unknown person under the name Satoshi Nakamoto in 2009.
  • What is BitcoinIt is considered as a highly disruptive from an economy angle.
  • Basically, a form of digital transaction, the transactions carried out using Bitcoins is usually recorded in the form of what are called Blocks. These blocks basically work like ledgers and when a block is completely filled in the next block is created. The blocks thus created get linked to each other in a sequence that is chronological in nature. The chain thus formed is termed as Block chain. The blocks are traded between two parties who are commercially related with each other.
  • The unit of Bitcoin is bitcoin.
  • The transaction in Bitcoin progressed without involving a third party broker as this is a decentralized currency.
  • Bitcoins are developed as a reward for a process where a user can get some commission in form of Bitcoin known as Mining. Mining is a record-keeping service completed through the use of computer processing power.

The advantage of Bitcoin :

  1. Very fast payment method
  2. Lower transaction fees
  3. It is 100% owned by Bitcoin users
  4. As it’s a decentralized currency, so No Third-party Interruptions
  5. Purchases do not come under Taxes

The disadvantage of Bitcoin:

  1. Risk
  2. Changes rapidly
  3. Difficult to understand

How Can Bitcoin affect Indian economy?

  1. Increase in Cyber Crime rates

BitCoin transactions happen on the darker side of the web which means no search engine will have access to the same. The darker side of the web is what is used by anti-societal elements for their illegal transactions. The source and beneficiary being the non-traceable aspects in typical Bitcoin transactions, the rate of cyber crimes may increase steadily.

  1. Massive opportunity for Speculation

Bitcoin, like the share market, has seen a lot of ups and down in the recent past. Owing to the ease that cryptocurrency like Bitcoin offers, investing in stock markets can be made a less cumbersome activity. This will open up the floodgates for people to speculate through Bitcoin.

  1. Money politicization happens

The current situation pertaining to money and its transactions is highly secured and monitored under controlled environments. The complete control is with the Government through Banks and other Financial Institutions. With Bitcoins, this will become an outdated process and money control will be totally in the hands of people.

  1. Money laundering possibilities

Bitcoin transactions are highly uncontrollable. The unpredictable nature of the crypto currency creates many loopholes for Banks and other financial Institutions from a process angle. Tracking individual transactions that happen using Bitcoins can hurt economic activities paving way for money laundering and other such illegal activities

  1. Loss of overall control

Using Bitcoins will create a situation where no one will have any control over money. In reality, no one will ever know who is controlling money at a world level.

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