Bitcoins: The New Gold
From being largely overlooked, bitcoins now are the new obsession of the season, with news of teenagers who have become millionaires overnight to increased regulation among bitcoin exchanges. Bitcoins, it now appears have finally become mainstream. The staggering rally in prices that bitcoins have witnessed over the short-term, if nothing else signify a possibility of it having now moved into bubble territory. Anyone looking to experiment with bitcoins should do so with utmost caution.
Over the past three years, the big three Indian Bitcoin exchanges including Zebpay, Coinsecure and Unocoin operated with self-regulated trading platforms with strict Know Your Customer(KYC)and antimoney laundering systems in place, despite the lack of regulations in the digital currency industry and market. The fact that the Indian government has begun regulating these local exchanges could signal a positive stance from them in the future.
Bitcoin technology began to enter public discourse in 2011, largely through its association as an anonymous payment system used on illicit and underground websites. The story mischaracterized the technology and failed to identify the most important and varied potentials of what Bitcoin has to offer. Let’s attempt to reboot your introduction to Bitcoin and convey some of the reasons why many in the financial and technology sectors are excited about its promise.
Bitcoin is an information technology break through that facilitates both a secure, decentralized payment system and a tool for the storage, verification and auditing of information, including digital representations of value. It's an online currency of sorts which facilitates transfers and transactions online, it could also be a valuable hedge against governments and manipulations from bankers that we have so well grown accustomed to hitherto.
Without dwelling too much on the details, bitcoins are created using a process called mining, wherein you would use your computational power to mine every new bitcoin. This process involves you running an algorithm on your hardware and the bitcoins thus mined will be proportional to the power and other computational resources you have expended in this process.
Navigating and understanding the complex & evolving regulatory constructs around Bitcoin ventures is imperative for businesses seeking to participate in this exciting new ecosystem
A bitcoin can be subdivided to eight decimal places, with the smallest unit a satoshi having a value of 1/100,000,000th of a bitcoin. In sum, under the Bitcoin source code, a total of 21 million bitcoins will be created as mining rewards and distributed as compensation to miners in the process. Just over 70 percent(14.7million of 21 million) of all bitcoins have been mined to date. By 2018 January, approximately 80 percent of all bitcoins will have been mined.
The ease in payment you could transfer money anywhere in the world without having to worry about crossing borders, bank holidays or paying a regulator. whilst using Bitcoins.
The control and security provided by a bitcoin far exceeds any traditional network, merchants cannot overcharge, and it is immune from identity theft as personal information remains hidden. Also bitcoins can be backed and encrypted to ensure the safety of your transactions.
Difficult to use. Bitcoin is not consumer friendly. Most software to control, provide custody or transact in bitcoins is complex or difficult to use. Often, third-party software and solutions that can simplify this use involve entrusting bitcoins to such third parties. The biggest disadvantage with Bitcoins is the limited retail and institutional adoption; it still has a long way to go before more institutions accept this digital currency and it can be viewed on the same playing field as any other traditional player.
In summary, bitcoins we believe are a step in the right direction, but stringent measures need to be in place to ensure no malpractices are conceded. Bitcoin has evolved past the historical difficulty and unsavory public association with bad actors. The promise that is provided is something which all participants in finance or FinTech must be keenly aware. Additionally, navigating and understanding the complex and evolving regulatory constructs around Bitcoin ventures is imperative for businesses seeking to participate in this exciting new ecosystem.