Bitcoin

Bitcoin also known as BTC is a kind of digital currency which was first described in 2008 by Satoshi Nakamoto.

It was known as an anonymous P2P electronic payment system, which was aimed to minimize the use of Paper currency. Bitcoin is not maintained or managed by any central authority and its creation is automated by servers also called Bitcoin miners. Bitcoin runs on an internet based network and transaction is updated in real time with facility of periodic archiving. Bitcoin is further divided in 100 million smaller units which are named after the founder to be called as satoshis. The smallest unit is defined by eight decimal places.

Unlike other electronic transfer/payment system, Bitcoin can be transferred through a computer or smartphone without an intermediate bank or financial institution. Ownership of bitcoins is then authenticated by the involved parties using the dedicated servers using a public key encryption. Bitcoins are created in the Bitcoin miners in every 10 minute block of the transaction and it is expected to reach a hard limit of 21 million bitcoins production in 10 minutes by the year 2140. Bitcoin has a great utility and is accepted in trade by various merchants and individuals. Bitcoin is used for gambling transaction as well. Despite its wide use and easy interface Bitcoin faced criticism as a digital currency on the ground of its volatile market value, inflexible supply, and minimal use in trade.

Read Pros & Cons of Online Banking on GWI.

Bitcoin – the new Greener way of Currency Payment

Bitcoin is the technology which guarantees faster, safer, and secure mode of payment. It aims to reduce the use of paper for printing the currency worldwide which will result in saving the environment. Use of paper has been increasing manifold for the production of currency which is a threat for the environment as it requires felling of life supporting trees. Bitcoins helps in minimizing the interface of payment and also removes the problem of physical transaction. It is defined by its chain of digital signature with the help of which the owner transfers the coin to the next and so on. One digital signature and the currency is transferred to the recipient at the speed of light, well thanks to the technological advancement.

The technology also expects to reduce corruption, threat of theft/robbery etc. This will reduce the usage of metals (silver, copper, and gold in several cases) for the manufacturing of coins and also will reduce the use of paper, thus making it environment friendly.

Issues with Bitcoins

However, of all the advantages being mentioned about Bitcoin, it is important to note that large fluctuations in the dollar value of Bitcoin have resulted in criticism. It was said that Bitcoin cannot be a currency due to its deflationary bias. Also it was regarded that Bitcoin is nothing but the cyber equivalent of rare postage stamps which can never be regarded as money or currency. It is also alleged that Bitcoin has been reportedly used in hoarding by individuals and is involved in black market transaction.

Bitcoin is considered to be a digital virtual currency and is often branded as an investment scheme. However, it was accused of being a form of investment fraud known as Ponzi scheme.

Conclusion

Lastly we can conclude saying that Bitcoin is a solution to the problem of excessive use of paper and metals for currency and also is used to check the double spending problem. It uses peer-to-peer network and is a faster means of payment. However, it is now required that the Central bank formulates guidelines to give proper shape to the use of Bitcoin which when implemented will help the environment and the global economy in a large manner.