Started in 2009, this peer-to-peer crypotcurrency Bitcoin started the era of digital currency which was invented by Satoshi Nakamoto. It falls under the scope of cryptocurrency and is the first and most valuable.
It offers the lower transaction fee in comparison to other online payment methods. Decentralized operation makes it convenient for buyers and suppliers instead of currencies that are issued by government.
this cryptocurrency is used by private and public keys, that are formed with mathematical encrypted algorithm based numbers and letters. This key similar to ATM key is used for transaction and transmission. These transactions can be done peer-to-peer and instant. The independent companies and individuals, owning computing power can participate in Bitcoin network, popularly called Mining. It motivates the suppliers and buyers with rewards. The total supply of bitcoin is 21 million with periodic declining rate that is enforced by decentralized authority.
In bitcoins, there is no physical currency and bitcoins are usually kept in cloud in public ledger or digital wallet. And is verified by computing power. They are not hold by any government and bank. Not being on legal tender, Bitcoin is on top of popularity chart. Being easy, cheap and not tied to any regulation or country, it can be used by any merchant anonymously. Moreover, there is no card fee and it gives high value when used as investment.
With the rising rate of 1400%, bitcoin has raised from $1000 to $19000, resulting the hike in price and production cost can be bought directly from people or exchanges by paying hard cash, debit or credit card and wire transfers.
No doubt many have got a huge benefit but due to lack of government and central authority, people are still afraid of cryptocurrency and that arise a question – Why people think Bitcoin is illegal?
As we all know that Bitcoin is not managed or controlled by any government, hence making it democratic. And this makes Bitcoin do not fall under any category of currency. In fact the government has a fear that not falling under any currency, Bitcoin can be used for illegal purchases and money laundering, which makes it risky for investor.
Moreover, bitcoin is not a tangible currency and it offers no measures of anonymity, it is possible to bypass the banks easily as the bank details and identity. And free trading is done for this currency making it illegal as not held by any government, bank or financial institution and that’s the reason many countries have banned the usage of cryptocurrency.
Not only this, many business invested inappropriately in Bitcoins. There are multiple apps and website which allow person to use bitcoins and one can play online lottery and casino to make money. Along with this there are many app also which offer free bitcoins, influencing people to double the amount.
And as we all know that as there is no governed authority so most of the drug dealers buy and sell drugs online, without getting caught.
Also, bitcoins are not considered under taxable income, hence, making it easy for people to earn huge amount of black money and use it for inappropriate business or illegal work.
When a downfall happens in purchasing power after the government issues more money, inflation occurs. However, in Bitcoin the number is finite to 21 million, leaving no possibility to issue more currency. Hence, with zero risk of inflation in Bitcoins but it is not easy for government to keep a check on the same.
Unlike debit and credit card, the transaction fee is comparatively low, which does not help in country’s financial growth as it is becoming the favorite destination for small businesses.
However, as Bitcoin is most unregulated currency and countries like India, including Japan, Australia and China has started regulations and government is concerned about tax and the control on currency.
In fact, in 2018, when Bitcoin started the momentum gain, the Reserve Bank of India declared that banks will not deal with buying or selling of crypto currency. He bank committee submitted its report requesting to ban cryptocurrency. Not only this, the committee also proposed an imprisonment of 10 years with 25 crores as fine for individuals who carried digital currency.
Indians have mainly bought bitcoin through ZebPay, CoinSecure and CoinDelta via credit card. And some of these exchanges have their apps which can be downloaded on iPhone and android, which allows users to link their bank details and update KYC, which leads to frauds.
David Robson is the founder of Complus Alliance. He has been writing about different topics for almost 10 years. He’s main focus is delivering quality insights to a wide array of audience.