Bitcoins have always been subject matter of controversy and debate, right from the source of its generation to now its price speculation.
Not that bitcoins are trending in headlines for past few days as it has seen historic rise in its price, but it has always hit the news with major changes taking up in the country with regards to its trading.
Bitcoin, an online currency produced (mined) using the cryptography program is catching people's fancy. As on 4th Jan, 2017 bitcoin was trading at nearly $1018.32 per unit. This could really convince the massive and sudden spike as it crossed $10,000 per unit in past 3 days. Incredible gain!!
Cryptocurrency traded at an all time high of $11,377.
How are these Generated?
Bitcoin is like gold in many ways. Bitcoins cannot be generated arbitrarily. It has to be mined via digital means. There are only 21 million bitcoins that can be mined in total. Sources say that closing up to 80% of the finite supply has been brought into circulation already. Its a mathematical calculation that approximately 7200 BTC is generated per day considering 50 BTC per block and each block takes nearly 10 min to solve in a day of 24 hrs. Most bitcoins are mined in china, which has emerged as the largest market.
How far India Recognises Bitcoins?
The RBI has Maintained that bitcoin is not a currency, however trading in bitcoins are not illegal in India.Bitcoin trading takes place through recognised exchanges, in india there are four bitcoin exchanges Zebpay, Unocoin, BTCX India and coinsecure.
Bitcoin like gold, has emerged as a tool to hedge dollar risks. Two big consumers India and China have started discouraging gold demand. Import and trading norms.Interest in India picked up after demonetisation and at one time in mid-November bitcoin was trading at 40% premium.
Getting versed with Blockchains.
Any currency requires universal recognition of its value and location and features that cannot be replicated. All these features were translated into the ledger for the bitcoins, known as distributed ledger in blockchain parlance.
In common currency, exchange of value takes place with physical exchange. In bitcoins, the exchange of value occurs as ownership information is instantly published everywhere in all connected blocks using cryptographic hash functions. Security feature in digital currency is monitored using unique hash value for each message of transaction. The technology ensures that this value tag cannot be duplicated and any tampering becomes immediately evident.
Basic features of blockchain as told by Mrutyunjay Mahapatra(Deputy Managing Director, SBI) are
1. Sharing Capabilities: It can be user defined, Peer to peer, Top down or bottom up.
2. Transactions are bitcoin origined.
3. Tamper proof ledger of record keeping.
4. Efficiency and Speed are the USPs of this technology.
5. Normal trading cycle comes down from 10 days to two.
Other markets remain highly critical about bitcoins, it has also been noted that, unless bitcoins are used for ordinary transactions, 'it could be just another fad'.
