Bitcoin is one of the most popular digital currency tools acting as a key player in the cryptocurrency marketplace. Bitcoin instruments work on the principle of lower transaction costs as compared to other traditional online payment mechanisms and are operated by a decentralized authority. Unlike government-operated currencies, Bitcoin can be transacted for conventional currencies; in fact, its exchange rate against the dollar fascinates potential investors and traders driven by currency plays. Currently the market cap for all Bitcoin (abbreviated BTC or, less frequently, XBT) in circulation exceeds $7 billion. Speedy transaction and easy remittances have stabilized the Bitcoin trading network across many top –notch countries across the globe including Russia, China, Japan, United States, Sweden, South Korea, Netherlands, United Kingdom, Australia and India. The key benefit of Bitcoin system, equated to the digital currency methodologies established before Bitcoin, is that it permits transaction between any two parties without the mediation of an authority like central bank. A public ledger of transactions is maintained in the peer-to-peer network of Bitcoin users. The dealings such as the number of Bitcoins received and sent by a specific user (Bitcoin address) are maintained in that ledger. The Bitcoin cryptocurrency documents its transactions in a community log known as the blockchain. Its security depends analytically on the scattered protocol that maintains the blockchain operated by Miners. The Bitcoin functions in the mode as the ATM that comprises of a string of numbers or letters attached in a certain fashion. A pin is often presented to the user of the Bitcoin account for undertaking any type of monetary transaction with any individual across the globe.The prices of Bitcoins have gone through various schedules of appreciation and depreciation termed as bubbles and busts. In 2011, the value of one Bitcoin swiftly rose from about US$0.30 to US$32 before coming back to US$2. During the 2012–13 crypto – financial crisis, the Bitcoin price activated and recorded a high of US$266 on 10 April 2013, before hitting to around US$50. Bitcoin is 7 and 8 times more volatile than Gold and S&P 500 respectively. Its volatility is 18 times more than the US dollar. After a prickle in its value in 2013 and consequently stability of its price, the value of Bitcoin has started steadying of late. Between December 2016 and December 2017, the price of Bitcoin has risen almost 1600 percent.
However, recurrent disagreements and emergence of whims like ‘Gold for Bitcoin’ have raised significant legal and policy issues with respect to handling cybernetic currencies. The Reserve Bank of India and the European Banking Authority has also alerted the users against the dangers of virtual currency but has not recommended any regulations. It can be concluded that Bitcoin has become prominent inspite of its volatile nature as there are solid strikes in its assessment in a short time of period across the globe and even in India. Therefore, purchasing Bitcoin with the equivalent amount of risk taken as capitalizing in securities market prove to be a substitute in terms of earning revenues.
Dr. Niti Saxena