Bitcoin - Everything You Need To Know
Introduction
Bitcoin is a virtual currency (to be precise Bitcoin is cryptocurrency and a payment system). It can be defined as “decentralized means of tracking and assigning wealth or economy, it is a software protocol. It was invented by an unidentified programmer, or group of programmers, under the name of Satoshi Nakamoto. It was introduced on
31st October 2008 to a cryptography mailing list and released as open-source software in 2009. Bitcoin is the largest of its kind in terms of total market value. Bitcoin uses two cryptographic keys, one public (username) and one private (password) are generated, no name, IP address or phone number is recorded. It is estimated that there a total of 21Million Bitcoin. Just like 1Rupee=100 paisa, 1Bitcoin= 108 Satoshi.
There are 3 ways to earn Bitcoin
Solving data blocks (Mining Software)
Goods and service Exchange.
Exchange currency (i.e. exchange your fiat currency for Bitcoin and vice versa).
SBI NETBANKING VERSES BITCOIN
RTGS: Real Time Gross Settlement
NEFT: National Electronic Fund Transfer
Bitcoin
Retail 2-5
Corporate:>5
50k at a time
No ceiling
Processing fees 25-55 Rupees
2.50-25 Rupees
None
Instant
1 hour cycles
Up-to 10 minutes
Bank account needed
Bank account needed
Not even ID is needed
only Bitcoin wallet
ADVANTAGES OF BITCOIN
Safes from duplication (i.e. cannot be copied) by frequently checking code at an interval of 10 minutes.
No Tracking
No Transaction costs
Bitcoin cannot be stolen
No risk of charge backs
It can easy be converted into Dollar from MT.GOX
DISADVANTAGES OF BITCOIN:
No central bank has authorised Bitcoin
No trade through BSE, NSE, commodity exchange (SEBI, FMC)
No Forex dealer under FEMA converting $$=Rs=Bitcoin illegals
Bitcoin Exchange website= legal status unclear
Risks
It can be Hacked, phished, damaged by malware, password lost. In all case, money will be lost.
Consumer courts cannot help as these bodies follow fiat currency.
Mere digital code, no intrinsic value, not backed by Gold Silver or crude oil.
Same with all other crypto-currency lite coin, bbq coins, dogecoin etc. Even in India Laxmicoin.com is founder by Mitts Daki (US) and Raj Dangi (Bangalore) and promises to give 30% of profit to NGO but RBI denied their proposal in 2013 as they stand “Examining the issues in Digital currency”.
Buysellbitco.in; First Bitcoin exchange in India; founded by Mahim Gupta from Bhopal. It was closed by RBI in 2013. They provide around Rs 14,400 for 1 Bitcoin and sell 1 Bitcoin for around Rs 14,800.
Reserve Bank Of India and People Bank Of China denied it as legal tender.
As we Indians have Income Tax Department USA has IRS (Internal Revenue Service), IRS stand for Bitcoin.