Bitcoin On The Rise

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UntitledBitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital money. Bitcoin is an open source peer-to-peer electronic money and payment network introduced in 2009 by Satoshi Nakamoto.It is also known as crypto-currency.Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority ,there is no government, company, or bank in charge of Bitcoin. Bitcoins are stored by associating them with cryptographically generated addresses. These addresses may be stored on web services, on local hardware like PCs and mobile devices, or on paper print-outs.

Bitcoins are used as payment option for legitimate products and services and merchants have an incentive to accept the currency because transaction fees are lower than the 2 to 3% typically imposed by credit card processors. Notable vendors include OkCupid, Reddit, WordPress, and Chinese Internet giant Baidu. Many well-known retail outposts have begun accepting Bitcoin, which will go a long way toward legitimizing it. Besides online vendors like Shopperfy.com and even subway restaurants are accepting the bitcoins. That market is liquid thanks to a number of exchanges.

Bitcoin makes it impossible for double-spend transactions to happen. Transactions are irreversible.

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Bitcoin also provides near instantaneous undeniable confirmation that your money has been received or sent. You don’t have to worry about bounced checks. Bitcoin is impossible to counterfeit; a cash transaction could contain counterfeit bills. Besides, there is no prolonged settlement period.

The events in Cyprus have been an eye opener that Financial systems aren’t as secure as we believed them to be. It’s bad for consumer confidence but good for bitcoin. Bitcoin isn’t regulated by some central authority and governments can’t really take your bitcoins away from you which happened in Cyprus recently. Cypriots are planning to use Bitcoin to pay wages and for payments with their business partners. Money is flowing from EUR to BTC. There are easier ways to actually buy bitcoins, mostly because of BitInstant. Now we have advanced tools like Bitcoin Spinner integration which makes easy to buy and exchange bitcoins.

UntitledBitcoin interest has risen tremendously in China over the last few months. BTC China, a 2-year-old Bitcoin trading platform became the world’s largest Bitcoin exchange. The largest Bitcoin exchange in China is seeing ten times its usual trading activity, that’s because search engine giant Baidu  decided to accept payment in Bitcoin.

Bloomberg BusinessWeek recently reported on the excitement in the venture capital community around Bitcoin businesses. Market which previously made it possible for people to invest in companies like Facebook before they went public, has now launched a Bitcoin investment vehicle. The Bitcoin Investment Trust (BIT) allows investors to get in to Bitcoin through an investment vehicle as opposed to a direct investment. This simplifies the process of investing in Bitcoin by solving the challenges of buying, storing and safekeeping bitcoins.

The value of Bitcoins continued plunging on 7th Dec 2013, dropping below $700 after the Chinese government questioned the legal status of the virtual currency. A joint statement from several Chinese official bodies said Bitcoins are not a currency and cannot be used as a form of payment by any businesses or financial institutions. Within 10 minutes, the value of Bitcoin went from just over $700 down to $ 680.

Bitcoin could be extremely useful. What is crucial is Bitcoin should attain price stability Right now the whole Bitcoin market is worth around 6 billion dollars, but if it were worth one hundred times that, a Bitcoin would cost $60,000. At that point, price instability rarely affects its market.

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Utsab Shrestha

The author is pursuing Masters in Business Administration from Symbiosis Institute of Business Management, Pune.
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