Bitcoin is a mystery to most people.No they are not any ordinary coins which have been floated in the market.it is rightly said that the technology is growing rampant no wonder there has been a birth of digital currency- BITCOINS. Bitcoin isn’t just a currency, like dollars or euros or yen. It’s a way of making payments, like PayPal or the Visa credit card network. It lets you hold money, but it also lets you spend it and trade it and move it from place to place, almost as cheaply and easily as you’d send an email.the originator of bitcoins is Satoshi Nakamoto .Bitcoin is an experimental, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.Users send payments by broadcasting digitally signed messages to their network peers. All transactions are verified, time stamped, and recorded by specialized computers into a shared public database called the block chain. The operators of these computers, known as "miners", are rewarded with transaction fees and newly minted bitcoins.
How does one acquire bitcoins?
- As payment for goods or services.
- Purchase bitcoins at a Bitcoin exchange.
- Exchange bitcoins with someone near you.
- Earn bitcoins through competitive mining.
While it may be possible to find individuals who wish to sell bitcoins in exchange for a credit card or PayPal payment, most exchanges do not allow funding via these payment methods. This is due to cases where someone buys bitcoins with PayPal, and then reverses their half of the transaction. This is commonly referred to as a chargeback
BITCOINS are not regulated by any agency .In india RBI issued a warning that it will not regulate any Virtual Currency including Bitcoin in India and warned people who were dealing with the currency in India of the risks involved, saying that they’re exposing them to financial, legal, operational and security related risk.bitcoins are notlegal so there is a full potential to misuse bitcoins for illegal purpose.
Bitcoin is unique in that only 21 million bitcoins will ever be created.However, this will never be a limitation because bitcoins can be divided up to 8 decimal places ( 0.000 000 01 BTC ) and potentially even smaller units if that is ever required in the future.The price of a bitcoin topped $900 last week, an enormous surge in value that arrived amidst Congressional hearings where top U.S. financial regulators took a surprisingly rosy view ofdigital currency. Just 10 months ago, a bitcoin sold for a measly $13 digital currency.
How to use bitcoins?
If you own some bitcoins, what you really own is a private cryptography key that’s associated with an address on the internet.f you want to send your bitcoins to someone else, you need your address and their address — but you also need your private cryptography key. This is an even more complicated string that you use to authorize a payment.
For the ordinary people who use this network — the people who do the buying and the selling and the transferring — managing addresses and keys can be a bit of a hassle. But there are many different types of programs — called wallets — that keep track of these numbers for you. You can install a wallet on your computer or your mobile phone, or use one that sits on a website.
With these wallets, you can easily send and receive bitcoins via the net. You can, say, buy a pizza on a site that’s set up to take bitcoin payments. You can donate money to a church. You can even pay for plastic surgery. The number of online merchants accepting bitcoins grows with each passing day.
More than $1.5 billion worth of bitcoins are currently in circulation around the world, with millions of transactions occurring daily. Needless to say, the popularity and usage of Bitcoin is picking up very quickly as more and more businesses and individuals are becoming aware of its benefits and advantages over traditional currencies.
How are bitcoins priced?
Bitcoins are like any other currency: they fluctuate in value relative to other currencies. Similar to how the rupee's valuation swung wildly against the US dollar this year, bitcoins have had drastic movements in price as well.
The value of a bitcoin is constantly changing, and there is no centralised exchange for it. Think of it this way: each time a bitcoin changes ownership from seller to buyer, the two parties need to agree on its price. There is no 'fixed' price. Usually, it's the seller's responsibility to give a fair price to the buyer based on what rate bitcoins are being traded in elsewhere. The difference between bitcoins and other currencies is that there is no centralised bank that prints the currency and sets relative values. Through transactions, the value of bitcoin fluctuates through supply and demand
The greatest advantage, however, is that all necessary information is public and transparent. Without revealing the identities of the buyer and seller, the entire bitcoin network is made aware of each and every transaction. This gives a tremendous amount of comfort to both parties of the transaction.
As Bitcoin gains popularity, governments are slowly but surely starting to take stances against/for it.The government of China took it one step further by barring financial institutions and payment institutions from accepting bitcoins as a form of payment. Governments are cracking down on "black markets" that accept bitcoins as a form of payment.
It will be difficult for governments to 'shut down' Bitcoin. In fact, there are talks that virtual currencies are the wave of the future to do their inherent associations of being decentralized, transparent, secure and hassle free.
We can only expect Bitcoin's meteoric rise in popularity to continue.