Bitcoin – Crypto Currency
Last month I came to know about this currency while surfing about IMF (International monetary fund) but this one will be next big sensation especially after current currency crisis in Greece. Actually currency crisis in Greece helped to increase the bitcoin value and slowly people started to accept “Virtual currencies are future”.
Just think a world there is no bank and there is no monetary policy to control interest rates as well for your currency and this world is called BITCOIN. To explain in simple it is purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution. But please note Bitcoin is not official currency and it is still in experimental state but lot of online shopping, few stock exchanges in world also started to accept this currency and even few economist started to accept crypto currencies are next future world.
To understand more on the working model please go through the below link and it explains clearly about bitcoin architecture and working mechanism
Why people started to accept this currency and how it started to gain trust?
- Today if we wanted to transfer money to some other bank account means we have to depend on bank business days (possible to use on holidays but there is charge on your transaction) but in bitcoin there is no such concept and the transaction is instant.
- You worked so hard to earn money and kept them in saving but due to monetary policy of the country your interest rates will be reduced/increased. But in crypto currency model there is no such concept your valuation remains same.
- There is no chances of fraud because transaction is instant but the drawback is transaction is not reversible.
- In Greece crisis, banks have set money withdrawal limit in ATM to their country people. Just think a scenario where you cannot withdraw your money from your account and during that time even few Greek restaurants started to accept BITCOINS. Now this set as an example to rest of the world especially the countries who are in more debt like Japan, Spain, Portugal and they started to trust this currency.
- There is no centralized body to control this and people may use this for illegal activities like terrorist etc.
- Security of the bitcoin wallets are still questionable and it needs to be improved so that security concern won’t be there.
During 1970’s paper crunch when experts talked about dematerialised form of securities there were lot of opposition that it won’t be possible because people won’t trust such concepts. Now in Stock Exchange world 95% stocks are in dematerialised form and soon bitcoin will also come to reality. According to my view this bitcoin concept needs few regulations and adaptions so that it will get more popular and integral.