Bitcoin in simpler words called a digital asset or digital currency. The asset is something that has value. Like gold, property, land, house, and also more. In the same way, you can also sell Bitcoin in exchange for Money. But this is a digital currency and not has physical with you. So this is in digital form and can be stored on Hard disk. Uniquely we can use this as a payment option. So this is also can be paid through the entire globe.
No Involvement of Government and Banks
But bitcoin doesn’t have authority so-called a decentralized digital currency. Just like country currency, there is an authority grip. Similarly, the Indian rupee has authority from the reserve bank of India. So this is what RBI can decide the value and the notes to be printed. No one can control the value of this neither person nor organization. Uniquely no one can declare demonetization overnight.
Who invented bitcoin?
A person named Santoshi Nakamoto is said to invent bitcoin. As matter of fact, this person details are not known. Like where he lives, age, occupation, and more. He disappeared suddenly. Identically he is an anonymous person. People do not know that he is a person or a group of people like that of the organization.
Why bitcoin was made?
The major reason to take into consideration is the Financial crisis faced in 2008. But due to the mistake of banks, many banks were crashed. Therefore people over the world lost some lakhs to millions of money. Because of money loss. The banks were led to insolvency. Because of the wrong decisions and loss is carried by every individual and taxpayer. Furthermore, people realized not to rely on banks.
Decentralised Digital System
The founders of bitcoin say that it creates a decentralized digital system away from the banks and government. So that they won’t involve in this. Because there is a failure then the entire economy fails. But in the case of bitcoin, there won’t be economic fail if something goes wrong. Wherever there is a centralized system than hacking is possible. But decentralization is not possible.
When bitcoin was invented in 2008 then its value is almost Nill. But today its values are in lakhs. As currency in countries similarly, this is also a currency. But not physical it’s a digital currency. It can be used anywhere in the World. This is a computer file stored in a digital wallet.
Why Bitcoin has high demand?
Bitcoin is in limited supply. That is why it has a higher demand. Until now only 18 million bitcoin is mined. And roughly around 21 million can be extracted. Here comes the law of supply and demand. This means when the availability is leading then demand is more. In 2019 it became a gambling instrument. And every coin is protected with a private key just like UPI. Roughly almost 25% of this were lost because of a few reasons.
Few metals like iron, gold, and more are mined underground. But cryptocurrency is a virtual process. And are mined by solving high complicated mathematical equations. So if it solves then they are rewarded with Bitcoin. But in 2018 the government suggested not investing in digital currency because of fraud.
Is bitcoin legal in India?
After the budget 2018, there were enormous rumors came out on the legal status of bitcoin. During the budget 2018, our finance minister Arun Jaitley said that it won’t be a legal tender. It means you can’t use it in any shops or anywhere at shopping. Just like we won’t pay gold of us to go for dinner at a restaurant. Trading bitcoin is 100% legal in India. And also legal for exchanging. But in payment, we are not supposed to pay bitcoin.
Want to buy Bitcoin?
If you want to trade through bitcoin. And the easiest way is to the cryptocurrency exchange system. Exchange service is a website or an app in which rupees are converted into bitcoin and vice versa.
India’s largest exchange service is Zebpay.
And the world’s largest exchange service is coinbase. Because they are secured and trusted.
Of course, for every asset, there is a tax. Similarly, This has tax as that of other assets like gold, car, and more. Just like a short time and long term capital gains. But the government didn’t clear stand for it. And now most of the countries are accepting the bitcoin.
Bitcoin in different countries
In the USA, they are regulated just like other stocks. In Japan it is legal tender and can pay anywhere, In Germany, we can even buy a house. And in Switzerland using bitcoin we can pay taxes. But there are few countries in which it is not acceptable like China. So in China, these exchanges are banned. But in China mining is now possible. And major of the mining takes place in China. Likewise in Russia, there is a flip flop policy. So in which they say accepted fee times and not the other.
Frankly, the biggest advantage is that it is not dependent on any central banks. So if you wanna send a bitcoin to other then there is no third person involved in this step. Therefore the transaction phase is very less. And to the fluctuation of value neither banks are involved nor the government. And the major thing is we can transfer it globally. I mean to say all over the world this currency is acceptable except few countries. Generally, if we are transferring the money in rupees then we should pay charges, currency conversion, extra fee, and blah and blah. But these charges are one here. The next thing is blockchain technology. Blockchain technology is a financial sheet in which every transaction is recorded, secured, and stored cryptographically.
The biggest disadvantage is decentralization. Because if there is no authority to control the price then it always fluctuates up and down. These fluctuations are too high. For example, if I buy Bitcoin worth today 1 lakh. Then the next day may not be the same value, it may be 2 lakhs or 50,000. So it’s hard to predict whether it goes high or low. And the second one is transaction time and cost. But payment is also not that much easy. But these are kept on updating.
Investing money in bitcoin.
If you are interested in investing money then initially or firstly you must invest a little amount. So that if it becomes zero that you may not mind. There should be a belief that makes an alternative currency. Fee people also invest gold and assets hoping that their money increases. But never expect a high amount. This is a nice system in which a third person is not involved.
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