BITCOIN: THE WAY YOU VIEW THE WORLD
Written by Pawan Kumar Singh 6th Sem – ‘A’ (CSE)The Internet has become an integral part of our lives. In today’s world, the increased connectivity provided by the Internet has changed the nature of financial transactions. With recent developments in social media, peer-to- peer software, and smartphone technology, we have seen the definition of money extend beyond the traditional, physical tender of government-backed currencies to include mobile payments, digital currencies, and virtual goods. Joining this revolution of payment technologies is Bitcoin, “the world’s first completely decentralized digital currency”, created by a group of unidentified programmers named Satoshi Nakamoto in 2008.
What is unique about Bitcoin is its deregulated nature: it is neither controlled nor supervised by any commercial authority, government, or financial institution. Rather, a peer-to-peer network of users controls the creation and transfer of coins. Bitcoin’s independence from 3rd party intermediaries provides its users a highly desired level of privacy and convenience. Since its inception in 2008, Bitcoin has gradually gained traction around the world. While its early adopters consisted mostly of technology enthusiasts, libertarians, and cryptography experts, Bitcoin has slowly entered the mainstream consciousness. As of April 22, a single Bitcoin is worth 39, 82,827.29 Indian rupees.
The concept of digital cash, however, has been around since the 1980s and has since accumulated a rich history. In our examination of electronic currencies, we first outline the ideal properties of digital cash:
1. Secure. Digital payment systems should use high-quality encryption techniques to ensure a high level of security, such that transactions cannot be forged or altered.
2. Anonymous. Transactions should be private and accessible only to the parties involved. The untraced ability of transactions is an optional but desired property.
3. Portable. Digital cash should be independent of any physical location, and easily transferrable through the network.
4. Two-way. Digital payments should be peer-to-peer and occur between users (rather than a registered entity, such as a credit card company).
5. Offline Capable. Payments should be processed offline without requiring 3rd party authentication. Users should be able to send and receive money anytime.
6. Divisible. Digital money should be fungible and divisible into smaller units of cash.
Most importantly, the digital transaction space is particularly vulnerable to the “double spending” problem. Because electronic files can easily be duplicated, a digital coin can simultaneously be spent and retained in one’s computer files, allowing that coin to be effectively spent twice. Up until now, electronic payments have required a trusted 3rd party intermediary such as PayPal or Visa to verify the intent and authenticity of transactions. Bitcoin is “revolutionary because for the first time the double-spending problem can be solved without the need for a third party”.
To understand the facts about bitcoin, we must first understand aspects of public-key cryptography, digital signatures, and hash functions. All these three terms are important to understand the technical behavior of how a bitcoin accomplishes.
Hence in the last, the conclusion is that: The creation of true digital cash “depends upon the marriage of economics and cryptography”. The ingenuity of Satoshi Nakamoto’s design certainly embodies this quality. As we have seen, Bitcoin possesses many of the critical elements desired of an ideal digital currency: it is secure, pseudonymous, portable, peer-to-peer, offline- capable, and divisible. However, the most revolutionary aspect of this cryptocurrency is its deregulated and decentralized nature.
Still, Bitcoin isn’t without its flaws. Not only are there technical and economic vulnerabilities within the Bitcoin protocol, but it also lacks the consumer protection measures necessary for widespread adoption. Perhaps the most concerning aspect of Bitcoin is its potential for abuse at the hands of cybercriminals and terrorists. It is certainly this last reality that has caught the attention of government regulators and law enforcers. Due to the novelty of Bitcoin’s design, however, there is much ambiguity around its legal classification and its suitability for regulation.
Furthermore, Bitcoin is an instantiation of a larger, more powerful idea: cryptographic protocols can provide us privacy in a world where we are always being watched by Big Government, and our basic rights are consistently challenged by a state that is supposed to protect us. And ideas are very powerful constructs once an idea becomes accepted by the people, it takes on a life of its own. Just like how “you can never kill the idea of Silk Road”, it seems highly unlikely that governments could ever kill the idea of Bitcoin.
Bitcoins is one of the surprising investing element came up in last few years. As In our country many people invest in properties and gold, if we compare investing in gold with investing the money in the bitcoin. In 2011, the price of 10g gold was 26,400 Indian rupees, and as of 2021, the price of 10g gold is 46,850 Indian rupees. Now if we talk about the price change in 10 years in the case of bitcoin, you’ll be shocked to know that, so in 2011 the price of one bitcoin was 13 Indian rupees, and as of 2021, the price of bitcoin is already mentioned above. This is how digital currencies or cryptocurrencies are changing the way you view the world.