Unravelling the Bitcoin mania

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Giving a heads up today to majority of the investors, Bitcoins still oscillate in the spectrum of scepticism.

Bitcoin is the talk of town these days. Introduced by Sakoshi Nakamoto back in 2009, it was originally created for the purpose of verifying the fact, of carrying out monetary transactions without the involvement of third party. Bitcoins are completely virtual coins designed to be self-contained for their value, with no need for banks to move and store money. With the possession of bitcoins, one can carry out all the online commercial transactions. They are traded from the personal database that can be stored offline (cold storage) on the computer drive, smartphone or tablet.

Bitcoin currency is completely unregulated and completely decentralized. There is no national bank or national mint, and there is no depositor insurance coverage. The currency itself is self-contained and un-collateral, meaning that there is no precious metal behind the bitcoin; the value of each bitcoin resides within each bitcoin itself. They are solely determined by the forces of demand and supply. Bitcoins have become a tool for contraband trade and money laundering, precisely because of the lack of government oversight. The value of bitcoins skyrocketed in the past because wealthy criminals were purchasing bitcoins in large volumes without having kept a tab on.

Giving a heads up today to majority of the investors, Bitcoins still oscillate in the spectrum of scepticism. Its extraordinary price surge means its market capitalization now exceeds the annual output of whole economies, and the estimated worth of some of the world’s top billionaires. With the debate over its bubble status still raging, the flagship cryptocurrency continued its march higher on solidifying above $11,000 and bringing its climb this year to more than 1,000 percent.

“It seems demonetisation is not India’s last experiment with currency. The Reserve Bank of India (RBI) is now looking at the brave new world of cryptocurrency”

Bitcoin’s run-up has even seen it valued more highly than two of the world’s most influential banks. Goldman Sachs Group Inc.’s market cap was $97 billion, while Zurich-based UBS Group AG came in at about $67 billion. Add those numbers together and it still falls short of bitcoin.

To specifically talk about India, Bitcoin is hovering around ₹4.90 lakh mark in India against ₹1.79 lakh where it had been three months back. It seems demonetisation is not India’s last experiment with currency. The Reserve Bank of India (RBI) is now looking at the brave new world of cryptocurrency. The central bank is to consider its own cryptocurrency since it is not comfortable with the non-fiat cryptocurrency. The RBI has been repeatedly cautioning everyone about the usage of cryptocurrencies, flagging a slew of concerns stating that they pose potential financial, legal, customer protection and security-related risks.

Reserve Bank had flagged possible “black money” risks from virtual currencies like bitcoin, to a parliamentary panel stating that they are “susceptible to misuse” by terrorists and fraudsters for laundering money.

The Reserve Bank of India further hasn’t given any licence and authorisation to any entity or company to operate such schemes or deal with bitcoins or any virtual currency.

To say the least, bitcoin is a big scam, you support the network with hardware, time and electricity to process the transactions but eventually you give away more than you get! The only people who benefit from this currency are the initiators and the people causing the inflation, it is a smart scam, a digital one.