As we know that man has invented a lot of ways to enhance his efficiency and save the time. The concept to live in the ancient times and in the current era, are entirely different. The advancements and developments in human life from the beginning till now are known as “the Evolutionary period”.
In this period, the men have learnt the ways to grow, trade and business. In the inchoation, they used barter system for trade and business, and then the currency for each civilization was specifically introduced for this purpose. After words, the banking system was introduced. Now a day, the digital banking and the online banking system is very much popular in our societies for business and trade as the whole of the business is dependent on this system (which is known as e-commerce). After the online and digital banking system’s popularity, the concept of Cryptocurrency has introduced. It is the digital asset of the consumer which is used as the source of exchange based in powerful cryptography to store the financial transactions and to attest the transfer of asset.
Cryptocurrencies goes against the centralized digital currency and the main banking system, it adopts the procedure of decentralization which distributes or delights away the planning and decision making from a central authority. It works through divided ledger control or a block chain that works as a public financial database.
Bitcoin is an example of cryptocurrency, digital currency having no central bank or an admin. It was released in 2009. Since its release, almost 4000 alt-coins (other forms of cryptocurrencies like bit coins) have been introduced.
In 1983, an American Cryptographer invented the concept of cryptographic money known ecash. His name was David Chum. Afterwards in 1995, the finalized his conception in the form of Digicash, it was the beginning of e-payments for which a user software was required to withdraw bank notes and designate particular key before sending it to the recipient. It made it untraceable by the issuing authority, or the Govt. etc. After that a computer scientist named “Nick Szabo” who was famous for his researches in digital contacts and currencies invented the concept of bit gold which was not implemented ever but known as a gateway of bit coin. In this system it was necessary for the user to fulfill a “Proof of work” function with solutions to be put together cryptographically and published.
Bit coin was invented by a group of people named “Satoshi Nakamoto” and released as “open source software”. It is formed as a premium of a procedure named “mining”. It was exchangeable with all of the currencies, Products or services. There are more than ten million users using bit coin. (A research by University of Cambridge).
In the beginning it was used in black-markets such as Silk Road. It was a tor hidden service, thus the users were able to browse it easily and securely without potential traffic monitoring. It was launched in Feb 2011. It worth was started to be increased with the passage of time.
Its worth was stated from $0.30 per bit coin which increased up-to $998 in 2017 and on Jan. I 2018, its price was $13412.44. It shakes the economy of the world badly and that was the reason that china banned to trade in bitcoin in September, 2017. Thus in the first half of 2018 the price of bit coin fluctuated between $11480 to $5848 and after that it went down up-to 81% in Jan 2019 which was highest downfall.
Moreover, it was affected badly due to several hacks and crypto-currency theft, such as coin check in Jan, 2018, coin rail and bit thumb in June and Bancor in July. In 2019, $761 million worth of cryptocurrency were reported stolen.
In 2014, bitcoin was known as best as a source of exchange. There are so many features of a bitcoin, for example, it can be purchased a digital currency exchange. It can be utilized as an investment as well, as it may be profitable and could increase its worth. The venture capitalists don’t purchased bitcoins but funded it due to its infrastructure of payments to merchants, wallet services and merchants etc. The prices of bitcoin are fluctuating since beginning in the way of appreciation and depreciation. Keeping in mind the all above things, we may also remember that the bitcoin is not as much reliable as the central bank and is known as a speculative bubble in the economy. There are a lot of security issues with bit coin such as hacking, scamming, and phishing as in 2017, one million bit coins were stolen the cryptocurrency exchange.
One of the most important thing is that bit coin seems to be an easy way of illegal transactions which is generally harmful for the economy of our country. It also overlooks the taxation policies of a society. It also decentralized the central bank which cases the devaluation in the local assets or sometimes become the cause of hyperinflation. So, in the end, it may be concluded that we should avoid to prefer it on the central banking systems.